ML20154P981
| ML20154P981 | |
| Person / Time | |
|---|---|
| Site: | South Texas  |
| Issue date: | 01/31/1998 |
| From: | Bryant F, Von Rosenberg SAN ANTONIO, TX |
| To: | |
| Shared Package | |
| ML20154P838 | List: |
| References | |
| NUDOCS 9810230112 | |
| Download: ML20154P981 (40) | |
Text
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CW PUBLIC SERVICE OF SAN ANTONIO
~ '998 ANNUAL REPORT Mio230112vasos, ADOCK 0500049s I PDR
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F- . . SIGNIFICANT FACTS FOR THE YEAR
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4n y. . 81.032.202.000
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- Gross revenue increased $7,887.000 to ..
. a ~%
nM A%.9". q*v s
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e Fuel and operating and maintenance expenses Increased S1,610.000 to . ..S489.962.000 City payment increased 8955.000 to .- 8138.543.000
. .- 74 *
%. d . j. *' . Long-term principal and interest requirements on boeds p%egn W .,G,.
,n decreased $23,465.000 to .. .
.8193.835.000
- Maximum electric system load increased 92,000KW to_.. - .. 3,448,000 KW
' g - Keys,y .. 539,400
- 10.661 electric customers were added to total..
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, (.- + KWil sales decreased less than 1% to... _
..15,167.815,507 KWil
. 6.56e
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- Cost to residential customer per KWil..
_301,181
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- 996 gas customers were added to total .. -
. 26,775.033 MCF e MCF sales & reased less than 0.1% to... _
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- Cost to re Acuttal customer per MCF..... _ . 85.86 W 4 %. . ,, v(WV:%
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SUMMARY
FOR 1997-98 ($OOOs)
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... $1.032.202 QR Gross revenue..
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$$ _ pf Application of gross revenue:
.8256.836 hh
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- Fuel, purchased power, and resale gas costs,.
Other operating and general co3ts .. _
.157,291 s
W. a v .,% Maintenance costs.
._75,835
- 3. J ' ' , Q f' ~ *;ca
..1,851 Regulatory transition assessment ..
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New series bonds debt service and reserve requirements.... .186.244 5 e N ][g s;3fr N@hy[(,.
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Commercial paper debt service .. .15.841 s <
- v ..61.932
,. W Repair and replacement account - 6% of gross revenue...
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.5wJ J f.e.j 4@. Q % qe; 5W% a@t o s . . , a 138.543
-t # ,* " payments to the City's General Fund _
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1,190
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Other interest and debt expense .. .
1 r % 136.639
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..81,032,202 hk . , g j Total _
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. 8152,753 .
- !b yy 'p Bond proceeds.
. 39.555 Revenue from operations...
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[. Customer contributions and other proceeds - 7.392 d PM ;, ' . 8204.200 Total funding .
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PowarShare' Yes! I want nwre mfi rmanon about LAST WA FIRSt kW[ U;DDt[ NUAL PowerShare'.
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Central and South West Corporation Investor Services lieparunent C'r' SI#IE 2#
PO. Itos tsvole,4 1)allas,Texa< 7526t.-olf,4 This dNs not const-Me an c!?er to seti or a solicitat:cn of an c"er to buy secanties Sxn c.4ers and so:ctabens are trae by way of prospectus on:y and no sales at ccmmon stock uncer te pian willbe made or commitment to purchase acxpred unless a copy of the prospectus :s oelivered Them is no obltgation to partcpate in the plan, and these mawnats do not const:Me the Comorat:cns recommendation to pamcreate in the plan
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Profile of San Antonio's Qas and Bectric Utility E
City Public Senice (CPS) has what it takes to meet the challenges each day in providing excellent utility senices. The company's well conditioned team mem-bers call on their skills and knowledge to perform at superior levels.
One of the nation's largest municipal utilities, CPS sen*es more than 539.000 lower interest rates when CPS requires electric customers throughout its 1,566 financing for large projects.
square mile senice area, and about CPS returns a percentage ofits 301,000 natural gas customers in the revenues to the City of San Antonio and urban San Antonio area. Purchased in since its formation has contributed 1942 by the City of San Antonio, CPS more than 82.2 billion. The S138.5 provides reliable, low-cost energy and million CPS payment for the 1997-98 energy-related senices for San Antanlo fiscal year represented the largest and the surrounding area, making source of income for the City of San Antonio an ideal place to live and San Antonio and about one-third of conduct business. the City's general fund revenue.
CPS owns and operates two coal-fired CPS also supports the community and five natural gas-fired power plants through education, employee volunteerism in the San Antonio area, and owns 28 and donations. Free tours and informative percent of the South Texas Project programs teach participants about the nuclear plant on the Gulf Coast. The utility, gas and electric safety and natural gas system has 4,158 miles of energy consen ation. Under the Volunteers lines through which natural gas is in Public Senice program. CPS empk>yees delivered. donated more than 14,000 hours0 days <br />0 hours <br />0 weeks <br />0 months <br /> and A diversified fuel mix at favorable raised more than $17,000 for nonprofit prices, low production costs and sound organizations in 1997-98. More than financial management have enabled 85 percent of the active work force and CPS to keep its rates lower than any 100 CPS retirees contributed to United major Texas city, and among the lowest Way, giving more than S500,000 in the
., in the nation. 'Ihe avemge CPS residential recent campaign.
gas and electric bill ranked third-lowest Low rates, reliable senice and a among the 20 largest cities in the United dedicated work force make City Public States for fiscal year 1997-98. The Senice a leader in the utility industry utility's favorable bond ratings assure and a vital driving force in San Antonio.
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i; . City Public Senice experienced several protections for municipal utilities another year of successes in 1997-98. The and their customers. The CPS staff will utility achieved some financial milestones continue to pursue such protections in f and continued its preparation for the legislation which is expected to be introduced br* future when customer choice is expected to in the next session, beginning January l ,. g }y ,lT bring retail competition to the electric utility 1999. As President of the Texas Public QQ industry in Texas. Power Association the CPS General Manager ke ; - Financial highlights of the year include will play a major role in developing the issuing $661 million in revenue and municipal utility position on legislation.
pqrpJ. , refunding bonds. The third-largest bond The additional time before a decision issue in the utility's history took advantage on retail competition is reached will allow
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Mgk[ of low rates to achieve interest savings which will continue to put the utility in a regulators and the industry to evaluate the changes already made in wholesale gh favorable financial position. The bond issue competition. Lawmakers also will be able to N44pp is part of a two-year debt management evaluate the experiences of other states N5$ IM. , strategy that will increase the use of bond that have approved retail competition.
4%h funds for routine construction while freeing To meet the challenge that will be l
l
[M^ cash for the utility's future needs, presented by retall competition. CPS has
$ W Financial benefit also resulted from the begun a program to market new products p.h ,.. ,) first year ofjoint operation of the utility's and services to current customers. Marketing P 5"6 generating facilities with those of flouston these pnxlucts and senices is expected to
' ' h'~ y & M' Lighting & Power Company. Under the help retain customers when they have a
'@ Q[:~h joint operating agreement. CPS received choice among electricity providers and also
'pi {%M S25.6 million in savings for the 11rst year to provide additional revenue to CPS. Utility which ended June 30.1997. By fiscal staff are studying various alliances to help year-end, the savings for CPS totaled S32.5 bring these new products and services to
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W , M$.jg million. The agreement will run for 10 years market, expanding the core gas and electric
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and will produce at least S150 million in businesses.
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- savings for the utthty. As CPS embarks on another year, the l'7N .p (
j p Despite support from several major utility has a solid f1nancial foundation, "q Qp - t% quarters, a bill to restructure the electric modern facilities and a conscientious work g7p " /d. force to meet the goal of providing reliable h hN [,[ . ./ pg, /g utility industry in'Ihough of retail competition failed in the late days Texas through introduction natural gas and electric senices at the lowest e .
of the 1997 Texas legislative session. possible price. CPS looks fonvard to the C<'
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uncertain if retail competition ultimately will benellt most consumers. CPS through opportunities which lie ahead and is poised to continue providing utility senice in a pm ') ;3 the Texas Public Power Association, was dynamic environment.
/ able to influence inclusion in the bill of
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.j. M M/'2 &&[4 ] Frank Bryant Arthur von Rosenberg l 9 Chairman Geneml Manager
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.>. ? City Public Senice experienced several protections for municipal utilities
- another year of successes in 1997-98. The and their customers. The CPS staff will utility achieved some nnancial milestones continue to pursue such protections in f and continued its preparation for the legislation which is expected to be introduced
[ future when customer choice is expected to in the next session, beginning January y %E bring retail competition to the ek'ctric utility 1999. As President of the Texas Public d, p% %j,, ,':N ' .
,1 industry in Texas.
Financial highlights of the year include Power Association, the CPS General Manager will play a major role in developing the
/ issuing $661 million in revenue and taunicipal utility position on legislation.
Md/ . refunding bonds. The third-largest bond issue in the utihty's history took advantage The additional time before a decision on retail competition is reached will allow
. E[k[DS.g g d' oflow rates to achieve interest savings regulators and the industry to evaluate the
? gMg which will continue to put the utility in a changes already made in wholesale g WA .. :
favorable financial nosition. The bond issue competition. I2wmakers also will be able to m g gyt/ is part of a two-year debt management evaluate the experiences of other states a wC,py strategy that willincrease the use of bond that have approved retail competition. h N~ funds for routine construction while freeing To meet the challenge that will be [ cash for the utility's future needs, presented by retail competition. CPS has
*
- Financial benefit also resulted from the begun a program to market new products 3s ;
o y' s g first year ofjoint operation of the utility's and senices to current customers. Marketing 0% 'i gh generating facilities with those of Houston these products and senices is expected to
^;g Lighting & Power Company. Under the help retain customers when they have a
' 7 % h $ps?p y3@Qu joint operating agreement, CPS received S25.6 million in savings for the first year choice among electricity providers and also to provide additional revenue to CPS. Utility " M['f \ w M which ended June 30,1997. By fiscal year-end, the savings for CPS totaled $32.5 staff are studying various alliances to help bring these new products and senices to
*p/ - f million. The agreement will run for 10 years market, expanding the core gas and electric Y"*X yC k 8, ; .M and will produce at least $150 million in savings for the utility.
businesses. As CPS embarks on another year, the Y- ' d( p Despite support from several major utility has a solid financial foundation, 4 9, p %. ; quarters, a bill to restructure the electric modern facilities and a conscientious work
% , utility industry in Texas through introduction force to meet the goal of providing reliable
, [e < NhN 3?C /]< k ,/ f ret il e mpetiti n f fled in the late days natural gas and electric senices at the lowest
- / g.N of the 1997 Texas legislative session. Though possible price. CPS looks forward to the ge pIf ~d - Y 4pgMl uncertain if retail competition ultimately opportunities which lie ahead and is poised NT? f will benefit most consumers, CPS, through to continue providing utility service in a
>+ [.Q ;({ jb the Texas Public Power Association, was dynamic erwironment. Qi e*h. *,, u hd [A /
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able to influence inclusion in the bill of
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.f SwAwS g CPS . MEETING THE CHALLENGE . PAGE 3
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' 2n 'nN' n City Public Senice has the energy During the 1997-98 fiscal year, CPS customers paid among the lowest rates and vitality to serve its more than in the state and nation, rates which have
.kfgd ' . 539,000 electric and 301.000 natural gas customers. With 4,515 megawatts of not increased since February 1,1991,
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f F %* . generating capacity and 4,158 miles of The CPS residential gas and electric bill ranked third lowest among the 20 largest A natural gas lines, the utility not only has [y#($U ' cities in the country. The average monthly the energy to serve its current customers
,, - electric hill for 1,000 kilowatts of electricity MjdN- but the ability to provide reliable senice
_3Mb - in major Texas cities during the year was -
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as growth continues. To assure that customer senice continues at the highest standard, CPS S76.99, while CPS customers paid S63.94. The amount of the average residential 5 y. A electric bill has decreased during the last
.i -( ' took steps during the fiscal year to maintain low rates, improve reliability and respond 12 years. An independent study conducted 7 ;g , , by the Jacksornille Electric Authority quickly to customer needs. These actions 4<
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in the past and will continue to do so. 1.000 kilowatt hours (KWil) of electricity
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. During the 1997-98 fiscal year, CPS City Public Senice has the energy sfWe ' and vitality to serve its more than customers paid among the lowest rates M k -.
,4,,M . . s~ 539.000 electric and 301,000 natural gas in the state and nation rates which have
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customers. With 4,515 megawatts of not increased since February 1.1991. f 'G.6%r.yk generating capacity and 4,158 miles of The CPS residential gas and electric bill
$ ranked third lowest among the 20 largest natural gas hnes, the utility not only has 3% g[M(M![fYAf {~ the energy to sene its current customers cities in the country. The average monthly electric bill for 1.000 kilowatts of electricity
?* d, . but the ability to pro 1de reliable senice M'kIi -
as growth continues. in major Texas cities during the year was -
't y,;hMk To assure that customer senice 876.99, while CPS customers paid $63.94.
5ggg, continues at the highest standard. CPS
'lhe amount of the average residential XQG took steps during the ilscal year to maintain electric bill has decreased during the last j[% -
low rates, improve reliability and respond 12 years. An independent study conducted by the Jacksonville Electric Authority [ 'ppppfM: quickly to customer needs. These actions have served CPS and its customers well reviewed residential electric costs for
,, % $* 7 - in the past and will continue to do so.
1,000 kilowatt hours (KWil) of electricity f [ ;*.P W aj'.. , yy{
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-.i. %" N.bE"4ICPE. .x;;w ev. MEETING THE CHALLENGE AT@# .7. -... % ; 34[.
from 60 of the nation's investor-owned the Texas coast, completed another and public power utilities. CPS bills were successful year of operation. Unit I achieved reported to have decreased 9.68 percent 100.7 percent of the rated capacity while for 1,000 IOVil during the 12 years from Unit 2 produced 92.9 percent ofits rated 1986 through 1997, capacity during calendar year 1997. Fuel diversification and diligent The South Texas Project generated 19.85 management have long been cornerstones billion net kilowatt hours of electricity, in keeping rates low. The ability to use a assudng it a place among the top producing diverse mixture of fuels, including nuclear nuclear plants in the country. CPS has a fuel, natural gas and coal to generate 28 percent share in the nuclear plant and electricity also has helped produce stable received 35 percent ofits generation from energy rates for San Antonio. STP during 1997-98. Ilowever, fuel management for the In a major change during the year, generation of electricity during the 1997-98 the owners of the nuclear plant transferred fiscal year was challenging. as insufficient management from Ilouston Lighting & . coal deliveries from the utility's rail carrier Power Company to the S'IP Nuclear Union Pacific Railroad plagued CPS. To Operating Company. The non-prollt 'r" make up for slow deliveries, CPS contracted
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e ,.. with an additional rail carrier, Burlington member board of directors with one
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Northern, and bought alternate fuels to representative of each of the co-owners reduce the use of more expensive natural
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V. and one for the Operating Company. - gas for electricity production. CPS pur- Co-owners reimburse the Operating chased 88.000 tons of South American Company for all nuclear plant costs in [ M.g ' coal and used petroleum coke, a by-product proportion to their ownership of the ; of oil refining, to supplement the Wyoming facility. -" -- ' coal supplied through Union Pacific. STP maintenance, plant support The South Texas Project. LOW PRODUCTION COSTS at the " ' and plant operations received a superior CPS power plants also are responsible for r f "ri a ranking in the Nuclear Regulatory productng nuclear plants in helping maintain low rates. The South Commission's Systematic Assessment of the c untm N the wear Texas Project nuclear plant, located near Licensee Performance for the period "
- Comparison of Residential Gas and Electric Bills for the 20 Largest U.S. Cities Based on 5 MCF and 1,000 KWH 200e n?90s .n 150a "49et "58 '8 "*'m-46143 E $'164 39 44023 g M
d -y e H10 06M2143 42' 83 g f 1008 ,, ,,, *g* "" ";S2 "" 5 K ff ? l N h 50 s ! ' y f' Q ; y , i General Maintenance Group b ! h k """ f h t J n V"W' " P"' P *' L ( 0 a si u s? s i(( B 9 9 b;i . ' """*"'h' h""v uunmer kxul. 03 Average for Twelve Months Ending January 1998 CPS . MEETING THE CHALLENGE . PAGE 5
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Au j }s N' . . . March 24,1996, to November 15.1997. plants ranking in the top twenty-llve. All these factors are crucial in maintaining UDI included fuel costs in the calculation e .,# i p; of production costs.
- safety standards and keeping production costs low, Efficient management of resources
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F The CPS coal. fired plants also has a positive effect on operating costs. in a step toward greater efficiency, CPS d ie: hed # achieved low production costs. In a report prepared by the Utility Data institute, has begun creating a more 11exible work
,,%- force by integrating power plant crafts.
W ',l - the coal-fueled J.T. Deely and J. K. Spruce plants ranked seventeenth and In 1997-98, the boiler crew, carpenters ( (k, ' twenty fourth respectively for their 1996 and insulators began cross training and g p@.% hs , production costs compared to the best will be known as the General Maintenance Group, with the skills to do a variety of TMQi; 4 performing 100 steam electric power plants in the country. The Deely plant power plant work. 'Ihe utility also developed h.
' ] h,v, - averaged 812.06 per net megawatt hour a SKILLS TRAINING EVALUATION and the Spruce plant averaged $12.64. PROGRAM which tracks the performance J.[aE l UT . .
progress of all apprentices and trainees.
,Y, The two plants were the only Texas
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r , initiated in 1994, the program will continue As part of the utility's continuing until ah production maintenarIy trainees im ovement program. Cl S replaced 55 and apprentices have achieved the ws of direct-buried ele cable with journeyman level. + cable in conduit during; t, 18.The To allow CPS to grow in a competitivejpfogram to replace app. mutely 1,360 emironment, the utibly,hasg1 steps"' miles of direct-buried cah will be carried to increase its efficiency through more out even more aggressivel, with a goal of a sophisticated management controls. g 80 miles next year and 100 miles in A NEWLY ADOPTED ACCOUNTINP]Q SYSTEM allows management to more following years. CPS also will augment the replacement program with a pilot closely monitor overall performance ar[id }3 project of in-place cable curing, a process maintain budgetary controls for the four > which improves cable performance and business units. The new system prmides life more quickly and more cost effectively. ~~*9"q CPS with a method to compare operational Gas system reliability was improved d and financial results with other utilities through the replacement of 9.152 steel and provides detailed information to allow gas services with polyethylene pipe in in-depth analysis and reporting, as well residential areas in San Antonio. Through as retrieval ofinformation on-line. the gas service renewal project, which Additionally, CPS made great strides began in 1995. CPS has replaced in ENIIANCING CUSTOMER SERVICE approximately 17,300 steel gas senices and better responding to customer and expects to replace 11,162 more by needs while reducing costs through the end of 1998. CPS also completed decentralization of gas and electric senice approximately 40.7 percent of the $12.5 ' construction requests. One-stop senice million second outer gas loop which will centers, which began as a pilot project in encircle San Antonio by the year 2000 to 1996, provide customers a single contact
^ "((,[," [
provide natural gas to growing parts of transforiners u htch wm be for all their energy needs. Internally, the the city, '"5'ah 8" "'*>hborhas uch one-stop senice center concept streamlines Another enhancement, which will "" "'""# ** planning and execution of senice work increase work force flexibility and reduce through improved coordination and the costs and duration of electric outages, communication. During the 1997-98 is the combination of three electric fiscal year, commercial and residential distribution crafts into one job, the planners completed the move to senice multi-skilled distribution journeyman. centers where they will be closer to The distribution journeyman will respond customers and closer to the construction / to tx>th overhead and underground electric ' maintenance work force, a move designed problems, rather than sening as a to both reduce costs r.nd provide excellent specialist in one service job. The result is e service.
- outages will be handled more quickly IMPROVED RT. LIABILITY OF because of reduced travel time and more ?-
SERVICE has become a top priority at "~* immediate availability of skilled labor. p _ dEC CPS, leading the utility to take steps Cost reductions will occur through the - "* '
- which will enhance an already enviable simplification of routine work and work To ensunwer record. Actions to improve reliability scheduling. rehaMitg. CIS is n,ptactna underground include enhancements to the gas and CPS is developing flexible programs electric cones through-electric systems and changes in the way to meet the needs of customers. Since "d 8"" ^'d "'"
crews respond to outages. December 1996, the utility has offered , CPS . MEETING THE CHALLENGE . PAGE 7
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%%+f,Wp commercial customers the option to sign through its economic impact on the
~ 7N$. .) community. Each year CPS transfers 14 long term service agreements in exchange c47DC.Qr. for the utility deferring their deposits. By percent of its gross revenues to the City Q7j the end of 1997-98,1,763 commercial of San Antonio general fund which pays 777 customers had signed senice agreements fer numerous City senices. The S138.5 h [
"p% , A... - and deferred more than S99 million in million payment for the 1997-98 fiscal deposits. The agreements, averaging eight year represents the largest source of ytJsl73 revenue for the City, approximately C years, translate into a more stable customer base for CPS and allow the one third of its general fund income.
~ %.[ Since 1942. CPS has contributed
= * . commercial customers the benefit of 3.+ - -
putting the cash into their business approximately $2.2 billion to the 4 operations. municipal government.
. y For the second time, the CPS Small 7-[ CPS completed plans to enhance its Business program received an outstanding
- 9, 3dMg key account program for the largest commercial customers. CPS will add five rating, the highest attainable, from the A marketing representatives to provide a U.S. Small Business Administration 3[ZW 7'
' closer link to commercial customers for Region V for promoting the growth of the their current and future energy needs. local economy. CPS pumped some S88 3dL );
The new plan includes 24-hour problem million in contracts into the San Antonio reporting and outage restoration priority. economy and increased minority firm Two of the four customer service participation in subcontracts by 200 centers were relocated to alleviate over- percent. To date, no other agency or firm crowding and improve convenience for in the five-state region has received an customers. In addition to allowing CPS outstanding appraisal. CPS previously achieved this top rating in 1994.
-( ,. 4 customers to pay their bills and conduct business, one of the relocated centers CPS employees served the community serves as a one-stop location for customers by volunteering and raising money for bW w 6. . . , .
to conduct business with CPS and with the city-owned water company. charitable donations. More than 85 percent of the active CPS work force and [genash tne rscan vaney sementary 139 retirees contributed to the CPS Although CPS has had a presence ym asentar:Aipprogram,18 CPS isk "Qj'"#"" ON THE INTERNET SINCE 1996 through the City of San Antonio, this United Way campaign, raising a record
$500,947. United Way funds more than
^ 80 human senice agencies which benefit M fiscal year the utility set up its own web site at www.citypublicservice.com. one-fourth of the population in Bexar
'D,j {"' llaving its own location has allowed the County. Energetic employees also charged
%M utility to expand information available life into the community through their W%%'%D " i to internet users. CPS incorporated "The work on volunteer projects. Under the Volunteers in Public Senice program, Q Electric Universel 300 pages of information j 4M. 1.269 CPS employees contributed nearly f r educators about the electric utility y, 14,500 hours of volunteer senice and f.$? 1:- w; M M '
e g industry, into the web page. srt In addition to providing energy for raised more than 817,000 for non profit
?[.k. %gc. ^ San Antonio, the utility provides senice organizations and community projects.
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The economic development activity resulted u San Antonio is a dynamic city with a t Y"Jy ;,hW@ $ in 3.215 new jobs for San Antonio. M a growing population. In 1997 that growt
, New business translates into growth moved San Antonio into the position of QQ eighth largest in the nation. The city's in utility customers. The number of CPS NT "
economy likeWise continues to grow. customers grew by 2 percent during the L fiscal year, an increase of 996 natural gas achieving an annualjob growth rate of hD. m customers and 10.661 electric customers. 4.2 percent in 1997. San Antonio ranked
""(N3fN
- seventh in the nation for new business The customer growth rate has averaged
,y formations in 1997, recording 9.3G3 2.2 percent during the last five years, an a average growth rate that is expected to new businesses, w *j continue for the next ten years.
p City Public Senice represents an As the number of utility customers p 'W g important component of the positive business environment in San Antonio. By grows. CPS continues to upgrade its
$ systems to improve efficiency, reduce providing the energy to power business and
, MSf industry at reasonable rates, the utility costs and provide excellent senice to
- N( customers. TECHNOLOGY plays a major makes an important contribution to the role in these improvements which not i growth and development of the San Antonio only are important for customers today
%gg2g economy. That growth, in turn, produces but will allow the utility to continue requirements for more energy, assuring g preparing for the future.
NN%(hh.t ,,, ,v the utility will have a bright future. The journey toward paperless Tourism, manufacturing, construction. b insurance, retailing and medical care communication of work orders and y- technical information took several more
. yg,,' $_ W 4
? have continued to be important economic steps during the fiscal year. Work began mainstays, along with one of the largest
. off C concentrations of military installations in on linking the utility's gas and electric
- S.
f, T m [b t. the U.S. In recent years, San Antonio has system maps to databases of information about CPS facilities. When completed, the g,.) [ BROADENED ITs ECONOMIC BASE to include numerous firms in the flelds of system will allow direct access to elec-electronics, data processing, biotechnology tronically stored facilities information so and telemarketing. That growing diversity employees can plan projects, answer customer inquiries and update facility puts the city in a good position to over-7w specillcations. Users will be able to click come the economic impact of closing Kelly Air Force Base in 2001. The Greater Kelly on map components, such as transformers. switches and gas mains, to call up a Development Corp. is charged with leasing screen display of pertinent information facilities at the base for re-use as they are
'~
.$ vacated by the military. The GKDC is using a personal computer. These uses of technology represent an investment that working to convert the facilities into a will improve customer senice and efficiend modern aerospace industrial park and N at the utility for the next severalyears.
international logistics center. Work og the utility's mobiler data e [q % gm , he tlow cost and des enjoy ce of gas service, The Economic Development Foundation tenninal sy' stem continued with installation also continues to attract new businesses py9', - of 200 laptop computers in utility trucks, to San Antonio. During the fiscal year,
'M . CR 15 companies announced new locations Installation and testing of software is
. expected in the next fiscal year.~ When U
p;gg or expansions in the Alamo City. The larger of the expansions included SBC fully operationa' the Integrated MOBILE
- DATA COMMUlGCATIONS SYSTEM,
[M j.'/~E.. Management Senices which added 1.200
# which uses satellite global positioning,'
jobs and WorldCom which added 1,500. ,
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( -... r- r. - ye M .- . jF h . will automate the dispatch of field personnel be used to dispatch personnel from home, responding to customer needs. The state- further ehminating some administrative of-the-art project consists of a series of and travel costs. CPS anticipates saving management programs which consider 81.4 million per year through use of scheduling. work load distribution and this technology. customer senice needs. Field staffla Travel time also will be reduced / , ", vehicles will receive text and data sen1ce through a communication link with the orders on vehicle-mounted screens using SAN ANTONIO TRANSGUIDE SYSTEM radio technology. The system will route which provides information about traffE - available personnel based on job prionty, conditions on major expressways. The / ' ' job ski!! requirements work loads and TransGuide infrastructure, which uses proximity to the job location. fiber optics. cameras, computers ande;, Cost savings will be ac hieved through overhead message signs, will provids sy more efficient scheduling of personnel. Information to the utility on the Internet. and customer senice will be improved The infortnation will enhance efficiency through reduction of travel time tojob through reduced travel time. an increasing krations. In some cases, the system will concern in a growing city. l CPS . MEETING THE CHALLENGE . PAGE 11
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Power plant improvements play a gas customers who have expressed w A major role in the utility's ability to meet p concern about price volatility. FIRM Sk$q growing needs for electricity. During 1997-98. CPS made improvements that PRICES also will benefit electric cus-w.. Sfi a m .;$ - ~ will enhance the utility's competitiveness tomers by reducing the volatility of the fuel adjustment portion of the bill when jgypQ"Wd -M, , in the future. Improvements in the gas is used extensively for generation. om control systems for Unit 3 of the gas-fired "g.h Draunig Plant will provide CPS with in a first for the utility. CPS will gV, greater generating reliability, will allow purchase pipeline quahty gas from a local landfill. About 5 percent of CPS resale A;p2 l,.d tighter control of temperatures and gas requirements will be satisfied at pressures and better response to changes q g-
- in generation needs and will lower below-market prices under the contract.
- i, ECOGAS will collect the landfill gas.
maintenance costs.The first personal l [ computer-based control system with a remove contaminants, process the gas to m .- 4gN Windows NT operating platform in the remove carbon monoxide and deliver the
%Q U.S.. the system marks the 11rst step in a gas to the CPS distribution system, with h -
cost savings passed on to customers. The plan to retrofit control systems in other p ih plants built in the 1960s and 1970s. result will be somewhat lower gas prices
%h 6 During the fiscal year, CPS further as CPS looks at expanded competition in
.. Igk, diversified its fuel supply in response to its gas business.
W.h.a$$ w f j; 1 The landfill gas purchase also E%pry,c slow-downs in coal deliveries from represents an emiromental benellt, since Wyoming. the regular source of the
#;vX '
h ' utility's coal for generation. The utility the gas would produce about 146 million
- kilowatt hours of electricity ifit were used
- Eg[,M EXPANDED ITS OPTIONS FOR FUELS for generation. In buying the gas. CPS by purchasing coal from South America M- and petroleum coke from the Texas coast.
eliminates a major environmental prob-7 l Undertaken on a test basis, these lem from landfill gas and turns it into an
%g4[pl
' additional fuel options will enhance the emtronmental benefit equivalent to approximately 1 percent of the annual utility's ability to generate electricity at electrical genemtion requirement of the utility.
reasonable rates to meet customers' 9 . As growth continues in both the gas
&p" '. needs for electricity in the future.
The ability to increase the natural and electric businesses. CPS has the energy to serve a dynamic area and the gas distribution portion of the business j]h, was enhanced through an agreement with ability to provide the commodities at com-petitive pnces. Continuing improvements the utility's gas supplier for fixed prices in the utility's infrastructure will assure on future deliveries. The fixed price will j that CPS can meet these needs not only reflect the futures market price at the g time CPS makes the agreement. The in the near term but also in the future. c - abihty to establish firm prices will gas serviceman demonstrates
. peftestility em reduce response '.^
%wge... _9e by receiving 'e sidstpuitic apork orders through the '
data 'cocamunications
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m&yge .y y (J%, ~ g<h - choose electricity providers CPS has With a history of success and all the Ys$?h ' components in place to continue that undertaken several initiatives that will M ' tradition, CPS looks fonvard to a bright favorably affect costs. _h future. Customer satisfaction levels are A DEBT MANAGEMENT PROGRAM
%2!q ~n , y. high and CPS continues its record of low was intuated to reduce the debt component
[s My;Q rates, well functioning facillues and of the utility's costs, a move which will E NO: ' enhance the CPS competitive position. financial strength. n u"* h . in focus groups and sumys conducted
'the inlual two-year plan included options to M]M fW .
during the year. CPS customers said they increase the variable rate debt up to $600 million through tax exempt commercial value reliability and expect reasonable
)[' , paper, short term variable rate demand rates. When they have an opportunity to MC bonds and/or interest rate swaps. The choose an electricity supplier, both factors will weigh in their decision.
plan also calh for refunding high interest bonds and paying ofidebt when funds are a CPS has a history of reliable service available. During 1997-98, CPS increased and rates that compare favorably with the commercial paper program to $450 those of other utilities. The utility intends million, called 8170 million of bonds and to supplement those basic expectations issued $661.2 million in revenue and of customers with PRODUCTS AND refunding bonds. These refundings are SERVICES that will help assure they projected to save S16.9 million in 1997 make positive decisions to remain with dollars over the next 16 years. CPS in the future. CPS also has initiated cost CPS has improved the BUDGET reduction measures in 'he organization's PAYMENT PLAN as an initial step in operations. The utility introduced a NEW developing new products and senices. BUDGETING SYSTEM which will provide When the new program is offered to k
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oneMay in Austinfor crs. customers early in the next fiscal year, management information to control costs more closely. Coupled with other inluauves, g the utility expects residential, commercial
%pyk Fi @S W e ,g,a cost control measures proved instrumental and industrial customers to respond de ~. g in reducing the operating costs, excluding
,,,,,.#'" positively to the opportunity to pay the fuel, by 6.9 percent from the projected a #
e# same amount each month while commit-costs during 1997-98. The utility plans to ting to CPS service for a spec 111ed period. carry these initiatives into future years to Additlo Tal products and services. primarily remain competitive. for commercial and industrial customers. As the Texas Legislature prepares
.g i are being developed to respond to a variety
,,_..4 for its next session in January 1999, CPS
; of needs, from area lighting to energy personnel are participating in hearings management.
, _ , _ being held by the Senate Interim Committee To help assure retention of residential on Electric Utility Restructuring. The and small business customers. CPS is hrfiscal year, committee will study a variety of issues, considering alliances with a variety of Including rate reductions, stranded pMg["r.asrvice
"" ' " , ' " customen potential vendors of products and senices.
g investments and renewable energy sources.
'lhrough ALLIANCES WITH LOCAL pn.n
- f BUSINESSES, the uuhty seeks to maintain to make recommendations to the Lieutenant fMy/ the dynamic small business environment Governor. CPS staff have testified in
.g ; UTILITY RESTRUCTURING so important to San Antonio ,, hue
. MM , PROCEEDINGS and continue to monitor
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Because low rates will continue to be the legislative process through an offlee in the Texas capital. The CPS General an important factor when customers l
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m Manager now serves as President of the tricity. A decision by the middle of 1998 Texas Public Power Association and will will allow time for construction,if that ,, represent the interests of rnunicipal utilities option is chosen. in restructuring debates. 4 > AS CPS LOOKS AHEAD, the ,
~ v The utihty also CONTINUES TO future holds uncertainties concerning 9 CHALLENGE THE PuauC UTruTY legislauve acuan on competittort khsiation' ~
COlGUSSION RULES that allocate the which could have a profound effect on the costs of open transmission access. The waj utilities do business. Despite the rules include a pricing structure which uncertainties. CPS has confidence in its will cost CPS an estimated Sl5 million competitive position and will continue to per year when put into full effect. The participate in the legislative process to rules require CPS to pay a share of protect the interests of municipal utilities statewide transmission costs for all and their customers. transmission owning utilities. based on While k>oking ahead to future the CPS share of statewide electric load, changes, CPS continues to concentrate and allow reimbursement based on a on its core businesses and to expand its utility's actual costs. As the utility with ability to offer new energy-related products the lowest transmission costs of any and services. The utility's 3,475 employees major electric mmpany in the state and with are prepared to continue meeting the relatively low use of others' transmission, challenges of providing reliable senice CPS cffectively will subsidize higher cost while controlling costs to assure rates transmission owning utilities. CPS has remain low. CPS has an erwtable financial joined with two other utilities in legal position and serves a dynamic and growing action challenging the validity of the rules community with facilities that are modern as inconsistent with PUC statutory and well maintained.1hese factors provide authority. A state district court has the basis for optimism as CPS completes upheld the pricing rule, but CPS and the another successful year and looks ahead other utility challengers were preparing to a competitive environment. an appeal at year end. In looking to the future, CPS wants + 2 to ensure it has the generating capacity to f serve its customers and to take advantage of OPPORTUNITIES TO SELL WHOLE- b SALE ELECTRICITY. The utility projects that as early as 2001, at expected growth rates. CPS will need approximately 400 megawatts of additional generating capaci-ty. While this capacity will be needed to provide low-cost power to customers in P the current senice area during peak ' times, the electricity also could be avall-able for sale to make up for a growing shortfall in other parts of the state. CPS management is comparing the financial CPS management stqffis ready to tackle electric retail competition. From left to right are Bill Gunst, Senior Managerfor Production: Ken Fiedler, Assistant General bencilts of building a combined gele Managerfor Customer and Distribution SerWces: Jamie RocheHe, Assistant General plant repowering an older unit already in Managnf r Corporate Sadus and Finann: Arthumn Rosenbug. Gennal Manager; and Joe TrevMo, Assistant General Managerfor System Engineering and the system or buying the required elec- Engineering Services. CPS . MEETING THE CHALLENGE . PAGE 15
Q*_
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^
OPERATIONAL AND FINANCIAL REVIEW FOR 1997-98 J LQ. t
,h g.
'%g[t / w (
%y 1 9;f' pp[- ikal year 1997-98 was an extraordinary and legislative aethities affecting the elec- OPERATIONSJ g % D /'
During 1997. CPS set an hottr y peak %" 9 ont for CIS as it prepares for restructuring trie industry. Also underway are reviews of the pricing structure and the implications demand record pf 3.448 megawatts and a Nfn the utility industry. CPS implemented oflegislation at the state and national levels. tecord,of Gl.032 megawatt new .%cets of its strategic plan designed to Financial results were strong for 24 hour usage houruVie ho {drly' peak demand record ireduce 6e cost components of its pricing h@~ jand to enhance itsbreaking competitive position 1997-98 and were marked by record-gross revenue. with CPS pcc6rrbd on Atigust 20. and marked the
" fourth time during the summer that the Os a low-cost energy services provider, s pievidtis year's record of 3,356 had been
" Current year accomplishments were completing its sixth consecutive year with-out increasing rates. The communities broken. In addition, the new peak sur-ghlighted by the implementation of a passed the 3.412 mqawatt peak demand and Asset Management Program in served by CPS continue to benefit from
$'@heYspring t designed to lower the debt rates that are among the lowest in the state and nation. Contributing to the estimated for the summer perkxt. The 24-hour usage record surpassed the 1996 homponent of energy costs, to maximize gross revenue record were all-time high record by 2.2 percent.
pthe effective use of cash and to enhance electric and non-operating revenue. Other During the fiscal year, CPS supplied M,g; financial llexibility into the future. All of significant highlights include reduced approximately 17 pe cent of its generation E G these factors are essential assets in a com- to ilL&P, more than 3.1 billion kilowatt operating and maintenance expenses and N4petitive em1ronment. A company-wide substantially lower financing costs. hours of electricity. The cumulative transfer g$iNieam was developed to monitor regulatcry CPS assets of more than 85 billion of energy to ilL&P through fiscal year
/
reflect the utility's sohd financial position. 1997-98 was 5.4 billion kilowatt hours. T 9%p[?[ Net utility plant increased almost 835 'Ihe CPS coal-ilred units performed million from expenditures for new facilities well in meeting the utility's generation g.A ' to a total of almost 84 billion at year-end. requirements and achieving low produc-g_ stacTmc SALES r cas v sao-oa.nu.v s' Ilestitted cash and investments reilected tion costs. Generation from coal accounted
@M G - se.o aww unspent bond proceeds from the May 1997 for 49.5 percent of the total during the
[ g bond sale and the additional funds fiscal year. Both CPS coal.11 red units. J.T. Deely and J.K. Spruce, were the only two Pf h"' "k generated from this year's very favorable S8 iu u
,u Texas plants ranking in the top twenty-five %Q g"'*, @d , b operations. In addition CPS has accumu-lated more than 832 million in savings among the best performing 100 steam-h 4* '
resulting from jointly dispatching CPS and electric power plants in the country, as
$h L s y y llouston Lighting & Power Co. generating reported by the Utility Data Institute for k h}j f Q plants. CPS is evaluating the potential 1996 production costs.
Qg*; - y # 6 b uses of the joint operating agreement This fiscal year, CPS took steps to h.[ .- - im im im m'
'" savings to include the construction of a further its ability to provide low-cost power to its customers despite coal delivery
" " ' " " ""***"*"" new combined cycle generating unit, delays and a volatile winter natural gas b purchased power arrangements to capitalize market. CPS received coal from an on wholesale energy demands and other r s E alternate supplier and rai! carrier and also economically benelicial projects.
yy Net long-term debt totaled 82.9 billion continued to diversify its fuel mix by wM mum k nm mom aM puna% pehni de PF LE g? (7 ,,,,,t,, refunding bond issue in May and the S150 CPS received 35.3 percent of its
,m j6m uc, ...v u, non v s, million increase in the commercial paper generation from the South Texas Project
,A nuclear plant which is ranked among the
"" au au program. This year CPS defeased or retired M' Q&
,o su 8535 million of principal maturities top producing nuclear plants in the q
}y through routine bond payments, the country. STP also has been ranked among m%
q@$ E refunding issue and a call of bonds. the lowest-cost electrietty produced using nuclear energy, an important factor in
@ g maintaining low customer bills. Other STP
. ., m C b achievements during 1997 include:
Z.%. : 4.. tj @d u I.c p jJ M ' 1 g 'j u
- m. im im m, im
;],
p%p y; s < Nk. ' WN' Y PEGE 16. CPS . MEETING THE CHALLENGE M;p -
OPERATIONAL AND FINANCIAL REVIEW FOR 1997-98
,ft m -
h Y
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Q); Y
. Unit 2 set a new 17.58-day standard .<ac, for a refueling outage duration among the F!silimr *{ SEPERDITURE8 m operating and maintenance 109 operating U.S. commercial nuclear expenses amounted to 8490 million and power plants, according to Nuclear Energy in total were essentially the same as last institute records. year. Generation fuel and gas for resale
. Unit I accomplished the briefest cost 8256.8 million 81.8 million more refueling outage in its history and the than the prior year, primarily as a result of second best performance ever at STP. the greater use of higher cost gas in the generation mix this fiscal year. The overall REVENUE AND SALES average cost for generation fuel and pur-Gross revenue for fiscal year 1997-98 chased power reflected a 7.8 percent set a new record of $1.032 billion, slightly increase for the year. Non fuel operating above the record set last year. Contribut- and maintenance expenses were essen-Ing to the increase in revenue was a re ord tially the same as the 1996-97 fiscal S844.8 million in electric system revenue, year, reflecting management's continued reflecting the recovery of fuel and cost control initiatives.
purchased power costs which were about South Texas Project operating and 8.3 percent greater than last fiscal year. maintenance expenses, while 5.4 percent Electric sales reached 15.2 billion kilowatt below the 1997-98 budgeted level, were hours and were essentially the same as essentially the same as the prior year. Two last year due in part to a milder summer refuelings were performed during the cur-than in the previous year. CPS served an rent fiscal year as compared to a single OROSS REVENUE rw v enano w s average of 10.660 more electric customers refueling in fiscal yearl996-97. e mn. m than the previous year. In addition. In fiscal year 1997-98, CPS was faced im
,, ,,ou off-system sales to other utilities and with complying with the Transmission
'" power marketers have been modest and Pricing and Access Rule, which was Su24 increasing at a steady rate, designed by the Public Utility Commission
. = w w _ ,.,=------- - - - -
" - ~ -- ,,,,,, Gas system revenue of $137.6 million of Texas to comply with legislative mandates decreased 7 percent from last ilscal year, to charge electric customers for wholesale w g gigg g g
^ ' . un primarily resulting from the recovery of open transmission access. The cost to CPS lower gas costs, as the unit price of gas for this fiscal year totaled $1.8 million.
SE 2m was 14 percent lower. The unit price of gas While maintaining low customer bills, o,, this year was more typical than the level CPS was able to increase its contribution a n_nu. en nu. n nu. expedenced in 1996-97. when increased for payments and services to the City of demand occurred due to the cold winter San Antonio in fiscal year 1997-98 to weather throughout the country. Gas sales $138.5 million, a record transfer of earn-amounted to 26.8 million MCFs and were ings. Since its inception in 1942 CPS has essentially the same as the prior year. An contributed more than 82.2 billion tc the OPERATING A MAINTENANCE EXPENSES additional 996 gas customers were served City of San Antonio's General Fund. ru n enano v ai m an. m by the utility during fiscal year 1997-98. The utility's debt service and reserve
" CPS reported a record 849.8 million in requirements for 1997-98 totaled S203.3
, NE '" " non-operating revenue which includes w million, a decrease of almost 31 percent
,, u Interest on investments and miscellaneous from the prior year. This was a direct
- income. The increase reflects the greater result of the Debt Management Strategic M *** "**
earnings on investment of the 1997 bond initiative implemented in the spring. This
. proceeds and higher operating and other
,, strategy was designed to reduce the debt fund balances. component of the utilitys price, maintain
=
"P M ,a n
,a mis favorable credit ratings, optimize the use a ro.i, po o a p.n a sne-r op-ane a M.ni.n.ne. of cash resources and enhance the CPS
' CPS Oth.r Op.r.tmg a Mmni.n.nc. competitive position.
CPS . MEETING THE CHALLENGE . PAGE 17
f b i 1997-98
/ OPERATIONAL AND FINANCIAL REVIEW FOR Cr,u s
)
Y ?" n
- w. 1' .
lI nm b% - J r J 3 M w&,j7: These goals were achieved partly by million balance in bond proceeds is expect. Q # 4 y4[
;1:
using less revenue for principal require- ed to fund capital additk.ns through next ments. Lower principal requi .nents this fiscal year i! Revet le from current operations pro-
;; fiscal year resulted from the bl70 million
[W k caH of bonds with commercial paper vided 19.4 )ercent of this year's construction "gs y procerc's, as the call included $32 million expendituus. Customer contnbutions funded 3.6 percent, while tax-exempt commercLd C, of bonds that were due February 1.1998.
, M *, f This financing transaction also resulted in paper l'nanced 2.2 percent.
% f interest savings from replacing higher I% lhd
>nt interest debt with Icwer interest debt. The FIN /.NCING CPS had made sign 10 cant efforts since N h 7 4 L, temporary suspension of commercia!
1983 in managing and controlling the cost hp
- Paper principal redemption also h contdbuted to achieving the objectives by of debt as part of the price of gas and elec-making funds available for other strategic tricity. Ilowever, further efforts were made j during 1997-98 to reduce the overall debt
$[gpf*g[ {
f '
, y
,g competitNe initiatives.
CAPITAL AND NET REMOVAL COSTS component to ensure the price for raeg is competitive in the future. M6 .- "skg, Expenditures for the replacement, in May 1997. CPS was involved in the w[f yg [ . improvements, expansion of the gas and electric systems, and net removal costs, were $204.2 million 832.1 million greater third largest lmud issue in the utility's history, taking advant4 e of the low interest rates in the bond iarket. CPS issued P A6 than last 3 car. The increase resulted from S661.2 million of New Series 1997 bonds, 47 g:ORoss REVENUE & APPLICAllON OF REVENUS W d a mem@n d Mlla f n.:c an.n.a m ai n, wiwo .i oo:: ,. M Md reDerting the utlhty's commitment to provide million in refunding bonds and $350 M *" g g ggg g3 M g m con safe and reliable energy to its customers. nullion in revenue bonds. This refunding is W'. p f p %i(M 7 M M] m *** Major projects included replacement of anticipated to save ratepayers at least 89.1 direct-buried ekctric cable with cable in million in 1997 dollars over the life of the h, @ RE(ICMM n mis conduit steel gas senices replaced with refunding issue. in June 1997, the tax-exempt Com-polyethylene pipe in residential areas and h @, ,, 2 @ Z E M " saa mercial Paper Program was expanded to a h E" "" considerable progress on the second outer gas hmp that will encircle San Antonio by limit of 8450 million from a former limit of f $ [ HEE the year 2000. The utility also has made S300 million. In July. CPS lssued S170 NT7.,"d'. 7,".,.d..*&nt d E.*" m.aEL.ne ET$*.,o, con **" technological investments, reflecting the million in low interest TECP notes. 8150 5 - A . som.yr million from the currently expanded pro-commitment to providing excellent service gram and 820 million still available from pl to customers now and in the future, At the expected growth rates, the utility the former limit. The decision to increase
;,y CPS variable rate debt was partially due to projects the need for approximately 400 7A _ stactRic =,. m oENEnATION & n.mPURCHASED
,, tu,n ane ' a POWER megawatts of additional generating capacity the level of cash and reserves in relation to yes the total debt outstandmg. In August, the by 2001. Evaluations are underway com.
y paring the cash requirements and benefits utihty used these proceeds to can $170
.+. - ur ,, million of higher interest New Series 13onds
$ u4 n8 n
"' n associated with building a plant, repowering for interest savings. The expected net pre-
- an older unit or buying the required X.h % electricity, sent value savings from this transaction is app u.aately 87.8 million.
During 1997-98 CPS sold $350 million E in revenue bonds. Proceeds from this and these financing ttansactions resulted
$,,k d the 1995 bond issue of S125 million were in 82.58 billion of fixed rate bonds on S';~ January 31.1998, or 85.2 pcreent of total h used to fund 74.8 percent of this year's i
ih M construction expenditures. The 8242.6 debt. CPS variable rate conunercial paper m5 26 tw 998 i ism Mi , . e. e nue.ar a co.: a Ges/ON ni ,~ on. - on
! Pu cts J Power p&
M w i A M. fp 7 FAGE 16. CPS . MEETING THE CHALLENGE J b J 7,, f g , 4 s th_
OPERATIONAL AND FINANCIAL REVIEW FOR f 997-98 of $450 million at year-end represents the including new products and senices, remaining 14.8 percent of total debt. The offering commercial customers the option weighted average interest rate on out- to sign long-term service agreements, standing bonds and conunercial paper on deferring utility deposits for some January 31.1998, was 5.53 percent and customers, improving the facilities in 3.69 percent, respectively. The bond which customers transact business and principal and interest coverage at the end offering electronic payment plans. of this fiscal year was 2.79, a record level looking to the future, CPS plans to for at least the last ten years. continue to focus on diversifying revenue CPS customers continue to reap the sources by offering new energy-related benefMs from lower financing costs products and senices, continuing to provide through the utility's ability to maintain the low cost generation and exemplary reliability highest rated debt for municipal utiuties in to the communities it serves and working the country. Fitch Investors Service. LP.. on customer retention by improving and Moody's Investors Senice. Inc. and Standard developing strong customer loyalty. In
& Poor's Rating Group assigned ratings of addition. CPS expects to see continued AA+, Aa1. and AA. respectively, to the New growth in its customer base for the electric Series 1997 Ilonds. They also gave the and gas systems. The energy sales forecast highest ratings issued to CPS variable rate also indicates modest increases in both debt under the commercial paper program. electric and gas sales.
In their review of utilities, both Fitch With respect to state and national CAPITAL EXPENDITURE 3 & Nt 7 REMOVAL COSTS and Standard and Poor's ranked CPS legislative action regardir.g competition. e-n.m emo aim ai w wwi. m oam among the best in the industry. The Fitch CPS will continue to actively participate in
~ Competitive Indicator ranked CPS the the legislative process to voice the interests
* ~
-"'f. :. Zf sao* second best among the 89 municipal and of municipal utilities and be an integral
,,.. Investor-owned utilities they considered in part in shaping the new environment in their competitive indicator rating. In the which it will operate.
= o., Standard & Poor's Business Profile CPS continues to evaluate the price
- rankings. CPS was included in the second components of the energy senIces it highest category.among the 58 public provides, recognizing that the price for
= retail electric utilities considered in their electricity will be a paramount factor for g g3 credit rankings. succeeding in a deregulated environment.
m Mdd'O;;7, s !!"Ol7,P Cost containment initiatives coupled with FUTURE PLANS additional phases of the debt management During 1997 98, a corporate team strategies will continue in the year ahead. was created to accelerate the review of all FUNDING OF CAPtTAL PROJECTS & systems and to develop appropriate strate-NET REMOVAL COSTS gies to assure year 2000 compliance. The e-em e uio-ai m wi wo plan includes milestones that will ensure m,, , g ,,,, that all core systems will be fully opera-tional and the delivery of senices to
~
sr M on customers uninterrupted well before the E O. **' year 2000 Q'ry # ~ ' In preparation to successfully operate p k
=
ggggggg on in a competitive emironment, CPS has j . ?\ f
- developed a marketing plan that focuses e, N v h g' MTOCK "" on retaining customers. Programs focus on N N JS1], lW sona me a n.v.no. r, op.,.i.on. niceting the riceds of the customers. " '
a comm., r.o., proc g ,s m go,n., cpi,on. 4 fW# CPS . MEETING THE CHALLENGE . PAGE 19
BALANCE SHEETS f l January 31, 1998 1997 (in thousandn Asset 8 (JflLflY PLANT, at cost (Notes 1,9, and 11): - Plant in senice - S 4,652,055 8 4.544,452 Electric .._ . __. 355,245 322,611 Gas 133.353 157.680 Genera! .. 5,164,980 5.000,416 Total plant in senice . 1,536,662 1,402,951 Less ac mutated depreciation 3,628,318 3.597,465 Plant in senice, net . 196,802 182.958 Construction work in progress .. _.. 44,251 54,256 Nuclear fuel, less accumulated amortization of $167,513 in 1998 and $143,700 in 1997.... 31,384 31.384 IIeld for future use.... _ _ _ 3,900,755 3,866.063 Utility plant, net _ RESTRICTED CASil AND INVESTMEN'rS (Notes 1,2, and 31: 246,018 51.735 Dond cor stniction fund._ 207,852 215,462 New series bonds debt service and reserve requirements .. 134,572 291,748 Repair and replacement account _ ._ . 33,623 27.040 Electric overhead conversion fund 32,521 15,626 Joint operations agreement savings fund (Note 91- _ 25,759 26,122 Cash restricted for customer senice deposits... __ 19,037 18.610 Other. 856.558 489,167 Total restricted cash and investments .. _ CURRENT ASSETS: 56,450 41,064 Cash and temporary investments (Notes I und 21. Customer accounts receivable, less allowance for doubtful accounts 64,146 69.661 of $2,031 in 1998 and $2.524 in 1997. 23,607 13,804 Other receivables Inventories and supplies, at average cost - 60,137 58.429 Materials and supplies .. 18,447 29,877 Fuel stock _ _._ 8.477 8.034 Prepayments and other 231,264 220.869 Total current assets .. _ UrlIER ASSETS AND DEFERRED COSTS: 32,030 27,875 Deferred compensation plan (Notes 1 and 6) 11,983 10.810 Other (Note 11. 44,013 38,685 Total other assets and deferred costs
$ 5,032,590 8 4.614.784 TOTAL ASSEE ...
The accompantli ng notes are an integral [xtrt of thesejinancial statements. PAGE 20, CPS , MEETING THE CHALLENGE
- January 31.
Zguity and Liabilities tws iw7
- un shouvands)
LONG-TERM DEffr: New series bonds (Notes 3 and 4) .$ 2,350,005 8 2,192,205 New series capital appreciation bonds (Note 4) 170.993
+
170.993 Total new series bonds . 2,520,S98 2,363,198 Unamortized discount on new series bonds (53,506) (67,168) Accreted discount on capital appreciation bonds. 113,916 94,708 Unamortized costs of bond reacquisition , (170,541) (166.386) New series requirements, net 2A10,867 2,224.352 Commercial paper (Note 5) 450.000, 250.800 Long-term debt, net 2,860,867 2.475.151 EQUTIY: Reserved retained earnings (Note 3)- New series bonds debt senice and reserve requirements 155,394 163,004 Repair and replacement account 291,748 134,572 Electric overhead conversion fund (Note 11 33.623 27.040 Total reserved retained earnings 480,765 324,616 Unresentxt retained earnings invested in or designated for plant and working capital 1,417,602 1.509.367 Total equity 1,898,367 1.833.983 CURRENT LIABILITIES: Current maturities of revenue bonds (Note 4) 61,640 93,145 Current portion of commercial paper redemption (Note 5) 0 27,000 Accounts payable and accrued liabilities 87.269 83.068 Total current liabilities. 148,909 203.213 OTIIER LIABILITIES AND DEFERRED CREDITS: Restricted - Joint operations agreement savings deferred credit (Notes 1 and 9) - 32.521 15.626 Customer senice deposits . 25,759 26,122 Other (Note 1) _ 15.450 15.779 Customer advances for construction (Note 1) 13,555 12,149 Deferred compensation plan llability (Notes 1 and 6) . .. 32,030 27,875 Other liabilities and credits (Note 1) __ _ 5,132 4.885 Total other liabilities and deferred credits 124,447 102.436 COMMITMENTS AND CONTINGENCIES (Notes 3, 6, 7, 9. and 10) - - TOTAL EQUTIY AND LIABILrrlES _._ _. S 5,032,590 S 4.614.784 7he accompanying notes are an integral part of thesefinancial statements. CPS . MEETING THE CHALLENGE . PAGE 21
STATEMENTS OF REVENUES, EXPENSES AND CNANGES IN RETAINED EARNINGS Years Ended January 31, 1998 1997 , tin thouwnds) OPERATING REVENUES (Note 11: $ 844,848 $ 841,699 Electric 137,593 147,980 Gas 982,441 989.679 Total operating revenue .- ._ OPERATING EXPENSES (Note 1): 255,055 256,836 Fuel, purchased power and resale gas . 161,874 157,291 Other operating and general 71,423 75,835 Maintenance 1,851 - Regulatory transition assessment (Note 10) 146,559 153,407 Depreciation . - 15.154 Tax equivalent to City of San Antonio (Note 81 645,220 650.065 Total expenses _ ._ I 337,221 339,614 OPERATING INCOME. NONOPERATING INCOME (EXPENSE) (Note 11: 34,636 43,761 Interest and other income (146,032) (141,869) Interest expense _ _ .. (19,208) (17,913) Accreted discount on topital appreciation bonds - Amortization of debt reacquisition, issuance, discount and other costs ._.. __ (23,558) (23.035) Allowance for interest during construction.. 4,743 3.654 INCOME BEFORE OPERATI!?.:, TRANSFERS 202,927 195.087 (138,543) (122,434) Payments to the City's General Fund (Note 8) __ 64,384 72,653 NET INCOME . . . . _ . . . . . _ . . 1,833,983 1,761.330 ACCUMUIATED RETAINED EARNINGS AT BEGINNING OF YEAR . _ _ _S 1,898,367 S 1,833.983 ACCUMUIATED RETAINED EARNINGS AT END OF YEAR . The accomixinying notes are an integral1 xtrt of thesefinancial statements. PAGE 22. CPS , MEETING THE CHALLENGE
STATEMENTS OF CASH FLOWS Year Ended January 31, 1998 1997 (In thousands} CASil FLOWS FROM OPERATING ACTIVrflES: Operating income $ 337,221 S 339,614 Noncash items included - Depreciation expense 153,407 146,559 Changes in current assets and liablities: (Increase) decrease in customer accounts receivable. . 5,515 (15,236)
, (Increase) decrease in other receivables (12.494) (251) * (Increase) decrease in inventories and supplies ... . . 9,722 2,066 lincrease) decrease in prepayments and other.. .
(443) (2,550) Increase (decrease) in accounts payable and accrued liabilities . . 4,201 11,355 Changes in other assets, deferred costs, other liabilities, and deferred credits: (Increase) decrease in STP nuclear fuel and other assets .. 10,069 16,419 Increase (decrease) in customer service deposits payable (363) 346 increase (decrease) in other liabilities and deferred credits _{82_) (670) Net cash provided by operating actidties. 506,753 497.652 CASil FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Cash paid for additions to utility plant and removal costs.. _ (199,471) (167,813) Contributions in aid and customer advances for construction _ 7,392 6,928 Proceeds from issuance of revenue bonds ... .
. . . . . 345,964 0 Proceeds from issuance of commercial paper _
174,500 0 Principal payments on revenue bonds _ _ ._ (232,325) (88,700) Commercial paper redeemed . ._ (2,300) (17.300) Interest paid -
- (146,032) (141,869)
Debt issue costs paid .. _ (2,508) 0 Joint operations agreement proceeds..- _ _ _ 16,895 15,626 Old series bond reserve defcasance .._ _ 0 (16,552) New series bond reserve asset transfer._-. 0 16.552 Net cash used for capital and related 11nancing activities .. _ _ (37,885) (393,128) CASil FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES: Payments to the City's General Fund ._ (138,543) (122.434) Net cash used for non-capital financing activities .. (138,543) (122,434) CASil FLOWS FROM INVESTING ACTIVITIES: Purchases of investments (1,277,250) (954,965) Proceeds from sales and maturities ofinvestments... 977,174 857,358 Interest and other income . _ 49,761 34.636 Net cash used for investing activities.. . (250,315) (62.971) NET INCREASE (DECREASE) IN CAsil AND CASil EQUIVALENTS. . 80,010 (80,881) CASil AND CASil EQUIVALENTS AT BEGINNING OF YEAR - 26,679 107.560 CASil AND CASil EQUIVALEYTS AT END OF YEAR.. $ 106,689 $ 26.679 Reconciliation of Cash and Investments: Restricted Cash and Investments: Cash and cash equivalents . . _ _ $ 50,239 $ 17,434 investments 806,319 471.733 Total ,. _ . 856,558 489,167 Current Assets: Cash and cash equivalents _ _ _ 56,450 9,245 Investments - . _ -. _ 0 31.819 Total _ _ 56,450 41.064 Total Restricted and Current Assets: Cash and cash equivalents _ _ 106,689 26,679 investments .. 503.552 806.319. Tota' . .
$ 913,008 8 530.231 7he accompcmying notes are an integral part of thesejinancial statements.
CPS , MEETING THE CHALLENGE . PAGE 23
l NOTES TO FINANCIAL STATEMENTS JANUARY 31,1998 AND 1997 Proceeds from customers to partially fund construction
- 1. Significant Accounting Policies expenditures are credited against the costs for the projects.
ORGANIZATION - City Public Service (CPS), a Retirements of utility plant, together with removal cost less salvage, are charged to accumulated depreciation. The municipal utility owned by the City of San Antonio (the City), maintenance of property, as well as replacements and provides electricity and natural gas to San Antonio and surrounding areas. As a municipal utility, CPS is exempt renewals of items determined to be less than a unit of from payment of income taxes state franchise and sales property, are charged to maintenance expense. General taxes, and real and personal property taxes. CPS provides utility plant assets consist ofland, buildings, and equipment certain payments and benellts to the City as described more for general and administrative purposes that are used i commonly in electric and gas operations. ! fully in Note 8. i CPS computes depreciation using the straight-line method ) BASIS OF ACCOUNTING -The financial statements of CIS are presented in accordance with generally accepted over the estirnated senice lives of the various classes of accounting principles for proprietary funds of governmental depreciable property. Depreciation as a percentage of entitles. Acccunting records generally follow the Untform average depreciable plant was 2.99 percent in 1998 and 2.95 System of Accounts for Electric and Gas Utilities issued by percent in 1997. the National Association of Regulatory Utility Conunissioners. RESTRICTED CASH AND INVESTMENTS - Diese funds CPS has elected not to follow the pronouncements of the are generally restricted for uses other than current opera-Financial Accounting Standards Board (FASB) issued after tions. They may be designated or segregated to acquire or construct non current assets. Funds consist November 30,1989, which is an alternative of the Govern-mental Accounting Standards Board (GASB) Statement No. primarily of unspent bond issue proceeds, debt senice and
- 20. ACCmint!I) Land _ElmulciaLRep9111nc for Prop 11elaty reserves required for the New Series Bonds and commercial Eunds and Other Governmental Entitles That UsrAgpfi- paper, and funds for future construction or contingencies.
etary Fund ___ Accounting. This election avoids conillets created when the FASB issues standards that in 1995. the CPS Board authorized that a reserve be conflict with GASB pronouncements. established for converting overhead electric facilities to underground. This fund includes one percent of the prior FISCAL YEAR - The fiscal year ended January 31.1998, is ilscal years electric revenue from cities and unincorporated referred to herein as 1998: the fiscal years ended January areas served by CPS. When the fund was initially 31,1997, January 31,1996, and January 31,1995 as 1997, established, the appropriated amount included revenue 1996, and 1995 respectively. associated with Ilscal years 1993-94 and 1992 93. The appropriated funds and reserved retained earnings at Janu-REVENUE AND EXPENSES - Revenue is recognized as ary 31,1998 represent the unused balance from 1994 billed on a cycle basis. Rate schedules include fuel and gas through January 31.1998. cost adjustment clauses that permit recovery of fuel and gas costs in the month incurred. CPS reports fuel and resale gas As of February 1,1997, the Old Series Bonds were fully costs on the same basis as it recognizes revenue. defeased. The remaining txdance in the Old Series Bond Reserve was transferred to the New Series Bond Reserve at Cis amortizes its share of nuclear fuel for the South Texas the end of January 1997 and used to fund New Series debt Project (STP) to fuel expense on a unit of-production method. service requirements in February 1999. For further Under the Nuclear Waste Policy Act of 1982, the federal discussion regarding the Old Series Bonch New Series government assumed responsibility for the permanent Bonds, and their corresponding reserves, see Note 3. disposal of spent nuclear fuel. CPS is charged a fee for disposal of spent nuclear fuel, which is included in fuel Restricted Cash and Investments also includes the Joint expense, in the amount of S0.00093 per generated Operations Agreement Savings Fund. which was established kilowatt hour (KWH1 for its share of electricity produced by in June,1996. The Joint Jperations Agreement resulted STP. For further discussion regarding the STP. see Note 9. from the litigation settlement with Houston Lighting and Power over its management of the South Texas Nuclear Pro-UTILITY PLANT - Utility plant is stated at the cost of con- ject during the construction and operating periods. CPS struction, including costs of contracted services, direct mate- receives in cash monthly ninety percent of the savings rial and labor. Indirect costs, including general realized from the jointly operated systems. The CPS Board engineering. labor and material overhead, and an allowance authorized that the funds be segregated until a formal plan for interest used during construction (AlUDC). CPS for their use is adopted. In December 1997, the CPS Board computes AlUDC using rates which approximate the cost of preliminarily committed a portion of the Joint Operations borrowed funds. AIUDC is applied to projects estimated to Savings to partially fund the construction of a new cost in excess of $250.000. generating facility; a final decision will be made in fiscal year 1999 based upon the evaluations of the proposals. PAGE 24. CPS . MEETING THE CHALLENGE
CPS Customer assistance program funds, and insurance restricted and unrestricted, were all in U.S. Government or reserves are also included in this category. government agency obligations and were held in book entry form by the Federal Reserve Bank in CPS
- name, CPS' invest-Investments are stated at amortized cost which approximates ments are generally limited to U.S. Government or market value, The specine identification method is used to Government Agency or l'.S. Government guaranteed determine cost in computing gain or loss on sales of obligations by CPS Board Resolution and Policy, Bond securities. Amortization of premium and accretion of Ordinances, and State Law. Investments carried at amortized discount are recorded over the terms of the investments- cost plus accrued interest were 8908.8 million with a market
. value of $920.0 million at January~ 31, 1998. and were OTHER ASSETS AND DEFERRED COSTS - Deferred employee compensation, which is held by two authorized 457 $524.6 million with a market value of $530.1 million at Plan fund managers, is reported at market value as a non- January 31,1997.
current asset in Febmary 1998, the Plan was amended t provide that two trusts hold all assets for the exclusive ben- 3. Revenue Bond Ordinance Requirements efit of participants and their t>eneficiaries. Other amounts consist of unamortized debt issuance expenses, which are As f February 1,1997, the Old Series Bonds were totally amortized over the period of the outstanding bonds. defeased; the Trust indenture covering the Old Series Bonds became inoperative; and the provisions set forth by the Bond Non-current deferred costs also include a special assessment Ordinances for the New Series Bonds became effective. The fee by the Federal Energy Regulatory Commission for decom. New Series Bond Ordinances contain, among others, the missioning of U.S. nuclear fuel enrichment facilities. CPS following provisions: recorded this in Oscal 1994 to be amortized over a 15 year period to nuclear fuel expense. (1) Gross Revenue is applied as follows: (a) for maintenance and operating expenses of the systems, (b) for OTHER LIABILITIES AND DEFERRED CREDITS - These payments of the New Series Bonds. including the amounts consist primarily of liabilities relating to deferred establishment and rnaintenance of the reserve therefor, (c) for employee compensation, nuclear fuel assessment fee which the payment of any obligations inferior in lien to the New is paid in annual installments as enrichment decontamina-Series Bonds which may be issued, (d) for an amount equal tion and decommisslming, customer assistance prograrn contributions, customer advances for construction, and the to 6 percent of the gross revenues of the systems to ? e deposited in the Repair and Replacement Account, le) or Joint Operations Agreement Savings deferred credit. Operat-Ing reserves for property insurance and injuries and damages cash payments and benefits to the City not to exceed 14 are also included in this category, percent of the gross revenues of the systems and (0 any ~ remaining net revenues in the General Account to the Repalr STATEMENT OF CASH FLOWS - For purposes of reporting aml Replacement Amunt, cash flows, CPS considers all highly liquid debt instruments purchased with a maturity of approximately three months or (2) The following accounts are established: a) General less to be cash equivalents. No material noncash investing Acc unt, (b) Repair and Replacement Account, (c) Bond Con-transactions occurred during 1998 and 1997. Ilowever, there struction Account (cont %Ing the proceeds of revenue was a material noncash financing transaction invohing a bonds), (d) Rellrement Account - Interest and sinking fund refunding bond issue that occurred during 1998. For further portion (containing the monthly principal and interest discussion, see note 4. payments on the New Series Bonds), and (e) a Bond Reserve Fund portion (equal to not less than the average annual RECLASSIFICATIONS - Certain amounts in all the 1997 principal and interest requirements of all outstanding New financial statements have been reclassined in order to Series Bonds). As of January 31, 1998 bond reserve conform with the 1998 presentation. A new combined State- requirements for the New Series ik nds have been met. ment of Revenues. Expenses, and Changes in Retained Earn-ings is presented for 1998. The 1997 figures presented in 4. Revenue Bonds this statement were reported last year on the Statement of Revenues and Application of Revenues and Statements of A summary of revenue bonds is as follows: ,, Changes in Equity.
%eighted-Aveuge
- 2. Cash and Temporary Investments I"f[l]e
, pona, at unum u CPS cash deposits at January 31,1998, and 1997, were Mamnnes ,qnum niwx - im entirely insured or collateralized by banks for the account of s,, s,n,, senj
" *"d" CPS. For deposits that were collateralized, the securttles were sonas 1977. i997 1999 202o 3 issa 52 aiius 52.2x3.3 <a U.S. Government obligations held in book entry form by the Federal Reserve Bank in CIS name. CPS' cash book values ['"j$"i' ivx9 ana iwi 2002 - mi: 7 2m mm po m were $4.7 million at January 31,1998, and CPS' bank bal. Tout new senea,naumnianam3 i em unem m.uunneu,r nonas 3 5m xm 2aso.m ances were $16.0 million also at year end. ei un uu45 Toui new senes n,ma, oununam,. nci At January 31,1998, and 1997, CPS' investments both or cunem maiunnes gse g CPS . MEETING THE CHALLENGE , PAGE 25
Principal and interest amounts due (in thousands) for each in June 1997, the City Council approved an amendment to of the next five years and thereafter to maturity are: the ordinance which allowed for the expansion of the TECP Program to a limit of S450 million. Subsequently, CPS wr ennma inwrm Ta issued $20 million still available from the 8300 million 61,640 5 imo: former limit, and $150 million in additional TECP notes. Pro-svw s 5 12x 462 ym 95.2m 12u22 220.u 2 creds were used to call S170 million of New Senes Bonds in 2001 v2.ws n9342 212.337 August 1997. The bond call transaction resulted in expect-ed cash llow savings of $8.8 million during the term of the 4 called bonds, which equates to an expected present value ,
%g, 2.176.562 i .2NL920 3.417.432 savings of S7.8 million. l to malunty Toi s 2.ss2w 5 i m o.2no s 4.4%.m CPS sold an additional S4.5 million of TECP during Octobet in May 1997 CDS issued $661.2 million of New Series 1997 1997 which was used to fund construction costs for that bonds at an average interest rate of 5.65 percent. The issue month, bringing the total amount of TECP outstanding to the consisted of S350 million in revenue bonds and $311.2 program's new limit of $450 million.
million in refunding bonds. The new money bonds are expected to fund most construction requirements through CPS had been following a self imposed schedule to pay off the the next fiscal year and partly into the fiscal year ending Jan- balance of the principal used for the redemption of 8211 uary 31, 2000. million of long-term debt in August 1994. Under this payback, S2.3 million was redeemed in 1998; $17.3 million The refunding bonds were issued to refund $302.6 million in was redeemed during 1997; 816.7 million was redeemed certain outstanding New Series Bonds, and were 88.6 during 1996; $16.9 million was redeemed during 1995; and million more than the amount of bonds refunded. The 85.6 million was redeemed during 1994. In March 1997, the refunding transaction resulted in cash flow savings of 815.7 CPS Board of Trustees approved a resolution to temporarily million, which equates to a present value savings of $9.1 suspend the commercial paper principal redemption. This million, or 3.0 percent of the par amount of refunded bonds. was part of CPS' Debt Management plan to maintain a higher outstanding amount of variable rate debt. In August 1997, CPS issued a call for 8170 million in New Series Bonds, including S32 million in maturities due at As of January 31,1998, S450 million in principal amount year-end. For further discussion, see Note 5. was outstanding, with a weighted-average interest rate of approximately 3.69 percent and an average life of in prior years, CPS refunded certain previously issued and approximately 96 days. outstanding New Series Bonds through the issuance of New Series Revenue Refunding Bonds. The refunded bonds and The TECP has been classified as long term in accordance related trust accounts are not included in CPS' financial with the refinancing terms under a revolvmg credit statements. At January 31, 1998, portions of the bonds agreement with a consortium of banks which supports the (in taousands) which have been defcased were still commercial paper. Under the terms of the agreement, CPS outstanding as follows: may borrow up to an aggregate amount not to exceed $450 million for the purpose of paying amounts due under the TECP. The credit agreement has a term of two years. Fiscal year 1995 refunding.. S 99,555 currently extended until November 1,1999, and may be Fiscal year 1998 refunding., 297,695 renewed for additional periods. To date, there have been no borrowings under the credit agreement. The TECP is secured by the net revenues of the 5 Commercial Paper Systems. Such pledge of net revenues is subordinate and inferior to the pledge securing payment of the New Series in October 1988, the City Council of Stm Antonio, Texas (City Bonds and any New Series Bonds to be issued in the future. Council) adopted an ordinance authorizing the issuance of up to S300 million in Tax Exempt Commercial Paper (FECPl. 6. Benefit Plans Tnis ordinance as amended provides for funding to assist in ' the financing of eligible projects, including fuel acquisition The City Public Senice of San Antonio Employees' Pension , and capital improvements to the utthty systems (the Sys- Plan is a self-administered, single-employer, defined-benellt I tems), and to refinance or refund any outstanding obligations contributory pension plan (Plan) covering substantially all l which are secured by and payable from a lien on and/or a employees who have completed one year of senice. Normal pledge of net revenues of the Systems. The program's sched- retirement is age 65; however, early retirement is available uled maximum maturities will not extend beyond November with 25 years of benefit senice. Retirement benefits are 1,2028. based on length of senice and compensation. and benefits i l I PAGE 26, CPS . MEETING THE CHALLENGE
are reduced for retirement before age 55. The Plan is and 1996, approximately 815.3 million. 814.7 million, and sponsored by and may be amended by CPS, acting by and S13.9 million, respectively, was to fund the normal costs of through the General Manager of CIS. The Plan assets, the Plan each year. The remaining contribution in each year having a market value of $573.2 million at December 31, was to fund the amortization of the unfunded actuarial 1997, are held in a separate trust that is periodically audit- accrued liability. ed and which statements include historical trend informa-tion. For further information, contact the Employee Benefits Effective with the fiscal year ending January 31.1998, CIS Division at CPS. has elected to implement GASB Statement No. 27, account-
, Inc for Pensions by_ Slate and local Governntental Employ-The current policy of CPS is to establish funding levels. crs which supersedes GASB Statement No. 5, Disclosure of considering annual actuarial evaluations and recommenda- Pensioninformation by Public Entployee Retirernent Sssteun tions of the Administrative / Investment Committee, using and State and Local Governmental Emoloyers A schedule of both employee and employer contributions. Generally, funding progress under GASB Statement No. 27 guidelines participating employees contribute 5 percent of their total follows:
compensation and are normally fully vested in CPS' contribution after completing 15 years of credited senice. Actuaria saiumien note Such contributions commence with the effective date of """ "'"
"y*,_
participation, and continue until attaining normal or early retirement age or termination of employment. The balance of contributions are the responsibility of CfS, acting by and through the General Manager of CPS, considering actuarial 3'"'""*d^^*^^""*-- n6 m m information, budgetaIy compliance, and the need to amend # F""d'd '"" " * " ~ "" "* ** the Plan to comply with legal requirements or to ensure that 5 comed rayn,n _ ou us2 usw the Plan is appropriate and within the industry and community. *U^^'"'P'"'"'8'"' Cmered rayou OMS) .. 25 &E 3944 53 4% The total employer and employee pension funding, which includes amortization of past-senice costs using the unit credit cost actuarial method, is summarized as follows: Methods used for the January 1,1997 actuarial valuation in i+n include (a) the flve-year smoothed market method for asset un ihmamtu I.mploye comnhuimm - - valuation, (b) the projected unit credit for pension cost, and 5 ce 5 6/ml ces comnnunon% im e (c) the level dollar for amortization. The remaining amortization period is 16.52 years and is calculated using ' r i i the level dollar open amortization method. Tapenn s uo n i 5 uo2n Significant actuarial assumptions used for the January 1. The actuarially determined contribution requirement for 1997 actuarial valuation include (a) a rate of return on the 1998 was computed using an assumed rate of return of 8.5 investment of present and future assets of 8.5% per year h percent. For 1998 the past-senice costs were amortized over compounded annually, (b) projected salary increases a targeted 15 years, as compared to a 20-year amortization averaging 5.0%, and (c) post-retirement cost-of living for 1997,1996 and 1995, and a 30 year amortization for increases of 2.0%. The projected salary increases include an prior years. 'there were no changes in actuartal assumptions inflation rate of 4.0%. or cost methods from 1997 to 1998. Calculated under GASB Statement No. 27 guidelines. CPS' Effective December 1, 1996, the Plan was amended Annual Required Contribution (ARC). which is equivalent to whereby the insenice death benellt for active employees with the . Annual Pension Cost, was S12.2 million for fiscal year 25 or more years of benefit senice has been changed to equal ended January 31,1998. Employer contributions in relation the amount payable as if the participant had retired under to ARC were also S12.2 million with a resulting net pension the joint and 50% sunivor annuity form under certain obligation at year end of 80.
, stated spousal criteria, as defined under the Plan. The effect of this change was an increase in the January 1,1997 Pen- Prior year information is reported under GASB Statement No.
slon Benefit Obligation of 81.6 million and an increase in the 5. This statement requires that a pension benefit
, actuarially determined contribution requirement begin- obligation be measured using the actuarial present value of ning February 1, 1997 of $263 thousand with a credited projected benefits, n adjusted for projected salary targeted 15 year funding assumption for fiscal year 1997-98. increases. This measure is independent of the funding method used to determine contributions to the Plan:
CPS contributions amounted to 10.0 percent of covered however, the significant actuarial assumptions used to payroll in 1998; 11.4 percent in 1997; and 12.2 percent in compute the contribution requirement are the same as those 1996. Of the amounts contributed during years 1998,1997, used to compute the pension benefit obligation. CPS . MEETING THE CHALLENGE . PAGE 27
Under GASB Statement No. 5. the following represents considers age and years of service. The Plans may be CPS" pension benefit obligation (in thousands) as of amended by CPS. acting by and through the General Manag-December 31,1996: er of CIS. The annual cost of retiree health care and life im insurance benents funded by CPS is recognized as an Nr renren. bencruancund in cuse expense of CPS as employer contributions are made to the Siu.mi pan opan m. - programs. These costs approximated 82.5 million and 82.4 Nphr$,IeIsnee.nnancea scued denerau __ no.n 3 million for 1998 and 1997, respectively. CPS reimbursed engner nnaea nonveuca benenu .. s uno S43.80 per month for Medicare supplement for certain Toui penen beneni obhganon _ ._ ~ _ ~ w.M rettrees and their spouses enrolled in Medicare Part B in
- Nel auen available for plan benefin M50m 1998-tai rair u arkei uuet. -- _
osnfunded renuon benern obhgauon ....._ _ 5mm Retired employees and covered dependents contributed S974 Net assets available for plan benents were 105.7 percent of thousand and $925 thousand for their health care and life i insurance benefits in fiscal 1998 and 1997. respectively, in total pension benefit obligation in 1996. Net assets exceeded the pension benefit obligation for 1996 by 22.2 fiscal 1998, there we:e approximately 1,750 retirees and i percent of covered payroll. covered dependents eligible for health care and life l Insurance benefits, as compared to approximately 1,734 in Employees who retired pdor to 1983 are recching annuity 1997. payments from an insurance carrier as well as receiving some benefits directly from CPS CPS costs for fiscal 1998 In view of the potential economic significance of these and 1997 were S425 thousand and 8447 thousand beneftts CPS has reviewed the present value of the respectively, and were recorded when paid. postemployment benefit obligations for current retirees. The January 1,1997, valuations are $38.4 million for health and 814.9 million for life insurance benents. The actuarial Deferred Compensation Plan analysis of the present value of postemployment benefit obligations for other participants fully eligible for benefits are CPS offers its employees a deferred compensation plan estimated to be S31.9 million for health, S4.3 million for life created in accordance with Internal Revenue Code Section insurance and $2.1 million for disability benents. CPS began 457. The plan receives no contributions from CPS. It is partial accrual and funding of projected future available to all CPS employees and permits them to defer a benents in 1992. Funding totaled 85.4 million in fiscal 1998, portion of their salary until future years. Funds are managed 85.0 million in 1997, S7.0 million per year in 1996. and 85.0 by independent fund managers. The deferred compensation million per year for 1993 through 1995. is not available to employees until termination, retirement, or death, or due to an unforeseeable emergency. For the health plan, the actuadal cost method used is the Projected Unit Credit Actuarial Cost Method. For the life As a result of the Small Business Job Protection Act of 1996 insurance and disability plans. CPS uses a present value (the Act), certain provisions of the Internal Revenue Code 457 method to determine the cost of benefits, have been amended that are applicable to CPS' deferred compensation plan. Under the amended provisions, all Significant actuarial assumptions used in the calculations assets of the plan are to be held in a trust for the exclusive for the January 1,1997 actuarial valuations include (a) a benefit of participants and their beneficiaries; however, the rate of return on the investment of present and future assets assets do not have to be placed in a trust until January 1, of 8.5% per year for the bealth and life plans and 7% per year 1999. In February 1998. CPS trustees approved the amend- for the disability. (b) projected salary increases for the plans ment and restatement of the deferred compensation plan to ranging from 3.3% to 12.0% depending on age for base and provide that two trusts hold all assets of the plan for the other sadaries, and (c) medical cost increases projected at 8% exclusive benefit of the participants and beneficiaries. for 1998 and 7% thereafter.
- 7. Other Postemployment Benefits 8. Payments to the City ,
CPS prmides certain health care and life insurance bene 0ts The New Series Bond Ordinances provide for benefits and for retired employees. All former CPS employees are services totaling 14 percent of CPS gross revenues, as eligible for these benefits upon retirement from CPS. Plan defined, to be paid or provided to the City. The Old Series assets are held as part of CPS Group ilealth and Life Plans. Trust Indenture which terminated at the end of Oscal 1997, Plan funding is from both participant and employer also included a tax equivalent payment. contributions determined by annual actuarial and in-house calculations Retired employees contribute to the health plan in varying amounts depending upon an equity formula that PAGE 28. CPS , MEETING THE CHALLENGE
Gross revenue for 1998 and 1997 (in thousands) was as The settlement also included an arrangement to jointly follows: dispatch CPS' and IIL&P's generating plants to take em um advantage of the most efficient plants and favorable fuel uccine revenue ... $ x44m 5 841.t w Prices of each utility. This joint operations agreement must cu revenue._ i 37.m 147.vxo resd b at leaM M mWon m cumdaWe samgs pn par interesi and oiher inamic ... ._ m oi uM6 to CPS, or illAP will make up the difference in cash. A onr.s revenue.. Ti n en? s imois similar payment will be made by filAP to ensure benef ts to CPS of S150 million in savings during the ten year life of the
, Payments to the City for 1998 and 1997 (in thousands), as joint operating agreement. As of January 31,1998, CPS' total defined, were as follows: cumulauve share of the savings totaled 832.5 million.
""' l#
NUCLEAR INSURANCE - The Price-Anderson Act, a com-Tu equnalent _ .._ _ s 5 15.154 Prehensive statutory arrangement providing limitations on Refund gas and electns senicet _ 17.121 17io9 0 y n g n al wemnes, s m med Additumai cash paymeniu 121 R2 10s32, until August 1, 2002. The limit of liability under the Total paymenis to the City .- % iw 1 l u.sxx Price-Anderson Act for licensees of nuclear power plants is
$8.92 billion per incident. 'Ihe maximum amount that each 9, South Texas Project (STP) licensee may be assessed following a nuclear incident at any insured facility is $75.5 million, which may be adjusted for CfD is one of four participants in the STP, which consists of innation, for each licensed reactor, payable at 810 million per two 1,250-megawatt nuclear generating units in Matagorda year per reactor for each nuclear incident. CPS and each of Coudy, Texas. The other participants in the project are the the other participants of STP are subject to such proj w manager, !!ouston Lighting & Power Company assessments. CPS and the other participants have agreed
(!!IAP). Central Power and Lfght Company (CPL), and the that any such assessments will be borne on the basis of their City of Austin (Austin). Full power operating licenses were respective ownership interests in STP. CPS' ownership issued by the Nuclear Regulatory Commission (NRC) on interest in STP is 28 percent. For purposes of these March 22,1988, for Unit I and March 28,1989, for Unit 2. assessments. STP has two licensed reactors. The participants In-senice dates for STP were August 1988 for Unit I and have purchased the maximum limits of nuclear liability June 1989 for Unit 2. CPS' 28 percent ownership in the STP insurance, as required by law, and have executed represents 700 megawatts of plant capacity. At January 31, indemnification agreements with the NRC, in accordance 1998 CPS' investment in the STP utility plant was with the financial protection requirements of the Price-approximately St.7 billion, net of accumulated depreciation. Anderson Act. As a result of litigation settlements between lilAP and the A Master Worker Nuclear Liability policy, with a maximum other owners, the participants agreed to create a new limit of $400 million for the nuclear industry as a whole, pro-operating company which would replace !!IAP as Project vides protection from nuclear-related claims of workers Manager for the maintenance and operation of STP. Effective emp yed in the nuckarindustry afterJanuary 1.1988 who November 17,1997, the Participation Agreement among the do not use the wodm compensadon system as sok owners of STP was Amended and Restated and the STP remedy and bring suit against another party. STP could be Nuclear Operating Company, a Texas non profit non-member assessed up to approximately S3.9 million to pay its share for corporation created by' the participants, assumed this liability coverage during the life of the plant. responsibility as the licensed operator of STP. The NRC regulations require licensees of nuclear power plants to participants continue to share costs in proportion to obtain on stte property damage insurance in a minimum ownership interests, including all liabilities and expenses of STP Nuclear Operating Company-amount of S1.06 billion. NRC regulations also require that the proceeds from this insurance be used llrst to ensure that the licensed reactor is in a safe and stable condition so as to LITIGATION - CPS and HL&P entered into a joint prevent any significant risk to the public health or safety, operations agreement in June 1996 which resolved CPS' ~ claims against lilAP concerning the shutdown of the STP and then to complete any decontamination operations that may be ordered by the NRC. Any funds remaining would then rmelear plant during fiscal 1994 and cost overruns during the STP constretion period. The total value of the settiement be available for covering direct losses to property, was projected to be $225 million over a ten-year period. The owners of STP currently maintain 82.75 billion of nuclear property insurance, which is above the legally CPS received an initial 875 million in cash proceeds during required amount of $1.06 billion, but is less than the total the summer of fiscal 1997 of which S11 million was used to amount available for such losses. The 82.75 billion of nuclear reimburse CPS for litigation expenses incurred. The property insurance consists of $500 million in remaining $64 million was directly refunded to the primary property damage insurance, along with 82.25 billion ratepayers during September 1996. of excess property damage insurance that is subject to a retrospective assessment being paid by each electric utility CPS . MEETING THE CHALLENGE , PAGE 29
which is a member of Nuclear Electric Insurance Limited Purchase and construction commitments amounted to (NEILI. In the event that property losses as a result of an approximately 81.2 billion at January 31.1998. This amount accident at the nuclear plant of any utility insured by NEIL includes approximately S608 million that is expected to be exceed the accumulated fund available to NEIL. a paid for natural gas purchases to be made under the contract retrospective assessment could occur. The maximum currently in effect through the year 2002; the actual amount aggregate assessment under current policies is SI1.5 million to be paid will be dependent upon CPS' actual requirements during any one policy year. during the contract period and the price of gas. Conunit-ments also include 872 million for pipeline quality gas to be NUCLEAR DECOMMISSIONING - In July 1990, CPS. produced from the City of San Antonio " Nelson Gardens' , , together with the other owners of the STP, flied with the landfill under the contract which is currently in effect l NRC a certificate of financial assurance for the through the year 2017. Also included is 828 million for coal decommissioning of the nuclear power plant. The certificate purchases through 2000. 8169 million for coal assures that CPS will meet the minimum decommissioning transportation through 2004. and $12 million for treated funding requirements mandated by the NRC. The STP cooling water through 2005, based upon the minimum firm owners agreed in the financial assurance plan that their commitment under these contracts. estimate of deconunissioning costs would be reviewed and updated periodically, in 1994, the owners conducted a review Additional purchase commitments at January 31. 1998 of decommissioning costs. The resuhs estimated CPS' share which are related to STP include approximately 811.8 of decommissioning costs at approximately S270 million million for raw uranium and associated fabrication and in 1994 dollars, which also exceeded NRC minimum conversion services. This amount represents services that i requirements. will be needed for future refuelings during the next two fiscal years. In 1991, CIS started accumulating the decommissioning funds in an external trust, in accordance with the NRC's regulations. The trust accounts and related decommissioning The Public Utility Commission (PUC) of Texas has hability are not included in CPS' financial statements. At promulgated new rtdes designed to comply with legislative January 31. 1998. CIS has accumulated approximately changes affecting the utility industry. The Transmission Pric-S72.8 million of deconunissioning funds in the external trust. Ing and Access Rule (Rule) mandates that electric Based upon the 1994 deconunissioning cost study, the utilities charge customers for wholesale open transmission annual levelized funding was 08.8 million for both 1998 and access according to a formula based 70 percent on a single 1997, state-wide fee and 30 percent on the calculated economic impact of open access on each electric utility in Texas. This
- 10. Commitments and Contingencies rate structure potentially will cost CIS S15 million per year in additional transmission costs that will effectively in the normal course of business. CPS is involved in other subsidize competing utilities with higher transmission costs.
legal proceedings related to alleged personal and property The PUC's Rule includes a rate moderation plan that will damages, breach of contract, condemnation appeals and minimize the impact of the new pricing mechanism for the discrimination cases. In addition. CPS power generation first three years that the Rule is in effect. Under this plan, activities and other utility operations are subject to extensive CPS' costs for calendar year 1997 were 10 percent of the total state and federal environmental regulation. In the opinion of cost mentioned above; costs for 1998 and 1999 will be 20 management of CPS. the outcome of such proceedings will percent and 30 percent of the above cost. respectively. The not have a material adverse effect on the flnancial position or total amount of S1.8 million recorded in the 1998 results of operations of CPS. financial statements includes an estimated amount for Jan-uary 1998. CPS is exposed to various rins of loss including those related to torts, theft of and ce.struction to assets, errors and Last year. CPS petitioned the PUC to amend the Rule and omissions, and natural disasters. CPS purchases commercial challenged the Rule's validity in State District Court. CPS liability and property ins .ance coverages to provide also filed an appeal from the PUC's determination as to the protection in event oflarge/ catastrophic claims. In addition, level of transmission costs CPS may recoser under the PUC's , CPS is exposed to risks of loss due to death, injuries to. and Rule. CPS is currently appealing the State District Court's illnesses of, its employees. CPS makes payments to external opinion upholding the Rule's validity. trusts to cover the claims under the related plans. At January 31.1998 CPS has accumulated approximately 893.9 million The ultimate effect of the Rule and other developments in the of funds in these external trusts. The trust accounts and restructuring of the electric ir.dustry is unknown at this time. related claims liabilities are not included in CIS' linancial CPS is continuously monitoring developments as it positions statements. CPS has recorded 813.5 million of expense itself to maximize potential benefits and mitigate detrimental related to these plans for the year e nded January 31,1998. effects where possible. PAGE 30. CPS . MEETING THE CHALLENGE
- 11. Segment Information 1998 1997 Electric Gas Total , Electric Gas Total (in thousaruis) (In thou.scuuts)
OPERATING PIVENUE. . _ 8 844.848 $ 137,593 $ 982,441 8 841.699 8 147.9H0 $ 989.679 EXPENSES: Operating and maintenance expenses ... .. 394,768 95,194 489,962 379.219 109.133 488.352 Regulatory transiuon acessment . 1.851 1,851 Depreciation -.. . _ ._ 142,223 11,184 153,407 136.343 10,216 146,559 Tax equivalent to City of San Antonio . I1.793 3.361 15.154 Total expenses . 538,842 106.378 645.220 527.355 122.710 650.065 OPERA 11NG INCOME.- 8 306.006 8 31.215 337,221 8 314.344 $ 25.270 339.614 Interest and other income . - . . . . . _ . . . . 49,761 34.636 Net interest and debt expense . (184.055) (179.161 INCOME IIEFORE OPERATING TRANSFERS. 202.927 195.087 Payments to the City's General Fund ._. (138,543) (122.4341 NET INCOME . $ 64.384 8 72.653 CAPITAL EXPENDil1JRES... 6 152.454 8 43.302 8 195,756 8 131.777 8 40.491 8 172.268 ASSIGE Plant in service, net of arrumulated depreciation: Production - all S1? facthtles .. . . _ $ 1,654.579 $ 1.654.579 S t.715.906 81.715.90(1 Productton other farttities 685.793 685.793 698.015 698.015 Transmission factitues... 188,684 188.684 182.574 182.574 Distribuunn facilities . 707,146 $ 225.323 932.469 654.975 8 198.271 853.246 General facilities ... 39,106 13.021 52.127 38.216 13.393 51.609 Subtotal net plant in hervice .. 3,275.308 238.344 3.513,652 3.2H9.686 211.661 3.501,350 (dentillable construction work in progren... 121,231 10.992 132,223 117,922 17,422 135.344 Nuclear fuel, net of accumulated amortizauon - 44,251 44.251 54.256 54.256 lictd for future use . ..._ ... - 31.384 31.384 31.384 31.384 Total ldenttilabic utihty plant . 8 249.336 3.721.510 g 3.472.174 83.624.411 8 241.652 3.722.3.14 Net common uttitty plant and conunon C%1P.. 179.245 143.729 Total net utthty plant._ . _ 3,900,755 3,866.063 Other identillable assets . $ 169,821 $ 16,638 186.459 8 158.246 8 21.622 179.868 Total idenuftable assets and common plant /C%1P . 4,087,214 4.045.931 Unidentifiable assets.. 945,376 568.853 TUTAL ASSFTS. .
$ 5,032.590 84.614.784 TOTAL EQUrrY AND LIAlllLrrlES $ 5,032.590 84.614.784 NET WORKING CAITTAL ... 8 82.355 8 17Em s
CPS . MEETING THE CHALLENGE , PAGE 31
l l l INDEPENDENT AUDITORS' REPORT 4 The f30ard of Trustees City Public Service: We have audited the accompanying balance sheet of City Public Senice, a component unit of the City of San Antonio, Texas, as of January 31,1998, and the related statements of revenues, expenses, and changes in retained earnings and cash flows for the year then ended. These 11nancial statements are the responsibility of City Public Senice's management. Our responsibility is to express an opinion on these financial statements based on our audit We did not audit the financial statements of City Public Senice Employees
- Pension Plan. Those financial statements were audited by other auditors whose report has been furnished to us, and our opinion on the City Public Senice financial statements, insofar as it relates to the amounts included for the City Public Sen' ice Employees' Pension Plan, is based on the report of the other auditors. The financial statements of City Public Senice as of January 31,1997, were audited by other auditors whose report dated March 14,1997, expressed an unqualilled opinion on those statements.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence suppotilng the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation We believe that our audit and the report of other auditors provide a reasonable basis for our opinion. In our opinion, based on our audit and the report of the other auditors, the financial statements referred to above present fairly, in all material respects, the financial position of City Public Service as of Janu-ary 31,1998, and the results ofits operations and its cash flows for the year then ended in conformity with generally accepted accounting principles. f l, C , San Antonio, Texas ,. March 16,1998 PA7E 32, CPS , MEETING THE CHALLENGE
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FIVE YEAR FINANCIAL REVIEW - UNAUDITED kY a
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Years Ended January 31, Od*" l h (In thousands) g p 1997 i. 1995 1994 1998 gjNj GROSS REVENUE AND APPLICA' .J *g;/ e, . Gross Revenue: $ 781,661 L ge, S 844,848 8 841.699 6 777.657 1 6 ( 757.937 125,491
, j.Q. , . Electric revenue ...
137,593 147.980 108,625 J a* 110,694 28.568 3 ' 5 24.525 23 353 e~' Gas revenue .. 34 636 49.761 fkW Interest and other income .__ 81 893.156_ 8 930.505 914.850
$ 1,032,202 8 1.024.315_ 8 Gross revenue ... . _ _ . . . . -
W.4* N $$ Gross Revenue applied: 7A3 5M^ 8 260.215 g m Costs of operating the systems: _.__S 256,836 6 255,055 8 203.337 8 210.503 Fuel, purchased power and resale gas ~ 166.054 7 f Other operating and general expenses . - 157,291 161.874 172,745 164.885 72.848 88.528 i ,. 75.835 71.423 78.632 448.236 8 514.797 7 Maintenance..... S 489,962 8 488.352 8 4M.714 8
%,Z Total . . . . _ - ;h&$ Regulatory transition assessment.L S 1.851 .,gyja.,
ftg; % i 3,390
- 4- Debt requirements for Old Series ELnds : " 945 1,838 S 2.678 8 9 +' h Interest expense-
$ S 13.112 N.
12.567 12,840 12.235 (346) y phs Principai requirements - -- l16.639) 1871 (327) Resene requirements... 14.59l 14.586 8 16.156 hgj;y ~ S 8 p.127) 8 p;Ma p Total _ _ _ ._ 3 12,736 11.817
.g yf Payments to the City's General Fund: S 15.154 8 13.696 S S 6 16.464 Tax equivalent to City of San Antonio 16.163 pch @yh- Refunds for services . .-
17,121 17.109 16.587 90.953_ 96.60 t 121 42] 105.325 92 QE 124,882
% r:2f1, Additional payment ... - _
137,588 8 122.922 8 119.852 8
$ 138,543 8 i' +W Total -
f.,{ 'K 150.588 Q-$ 3- Debt requirements for New Series Bonds & Other: Interest expense _
$ 131.529 62,306 8 128.581 75.207 S 127.268 69.067 S 129.899 64.597 66.460 Principal requirements ._ 1.150 1.239 hj. g( Reserve requirements ".
(7,591) 16.227 1621) 22.795 8,429 23.746 15,841 22.975 3,300 Commercial paper debt service .. -
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k F* .'N(g . ., Other interest and debt expense . 1,190_ 6.667 6.287 8 3.739 222.180 8 230.016
- S 203.275 8 249.657 8 225.747
.k * ,
wr ; ',i A Total ... k bh. s Revenue available for construction and other business strategies .. S 198,571 8 151.845 8 96.876 $ 88.302 S 44.654 8 914.850 S 893.156 S 930.505 S 1,032,202 8 1.024.315 Total application . ._ - 2% e D4 ADDITIONS TO PLANT AND NET REMOVAL COSTS _ $ 199.457 8 168.472 8 164.455 S 148.333 S 123.396 1.977
%. $7
- Net rash expenditures.-
Interest during const action..
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4.743 3.654 172,126 8 2 818 167.273 8 3.072 151,405 S 125.373 S 204,200 8
,M# Total expenditures _ _
..Ws "I Funding for expenditures: 0 S 0
,,a 152,753 8 57,157 6 16.109 6 S 64.483 Dond proceeds .~ .. .
60,726 g;M 7 Revenue from operations _ . _ 39.555 4,500 108.041 0 110.104 33.299 81.278 53.811 Commeretal paper proceeds . .. 7,761 9,401_ 7.079 (p
- Customer contributions and other pnweeds...
7,392 6.928 151,405 8 125.373
%i Total funding . ---__ . . . .._ S 204,200 8 172.126 3 167.273 8
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.'W llA1ANCE SilEET DATA 2.18x 2.12x 1.78x 2.79z 2.47x
.ib Dond principal and interest coverage ~
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- Die Rmukitory Tnutsttui Assessnrntfor 19m nArts the eunuikuur ethrt of theftscal purs PuMic l'rihip Conunhsut intnsntissui cares Q ,( - Uns is the.first pur CPS has Dicturni such ex;w nse.
p 4. ** Dr (%f Scrtes (knis urrefully dehusaf as o/ rebngary 1.1997 taal at thru f9re tfr pronsions set Jorth lxj the kw &rrs fkwl Ordinance l Uw Old Serrs ikwids Resene Requinwenn M PN7 nfects a invisfer of the remuning assets of $16.532 to the Ww Senes Resenv. 4( q
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FIVE YEAR OPERATIONS REVIEW - UNAUDITED Years Ended January 31, Ilit thousands) 1998 1997 1996 1995 1994 OPERATING REVENUE Electric: Residential . $ 392,889 8 398,061 8 360.484 8 346,396 8 350.583 Conuneretal and industrial _. 329,241 322.595 304.090 301.319 315.156 Street lighting . I1,404 11.073 10.762 10.454 10,468 Pubhc Authorttles .. 87,198 85.488 80.812 78.504 86.370 Sales for resale .. 11,731 11.268 9.966 9.316 9.6 L 1 01f-system sales
- 6,667 6.828 5.580 5.923 3.958 Miscellaneous . _ 5,718 6.386 5 913 6.025 5.516 Total electrte $ 844.848 8 841.699 8 777.657 8 757.937 8 781.662 Gay Residential .. S 79.791 8 87,362 8 65.668 8 65.965 8 75.708 Commercial and Industrial . 47,547 50.360 36.305 Public Authorities ,
37.982 41.94 t S.197 9.284 5,763 5.824 6.905 Miscellaneous . 1,058 974 889 923 934 Total gas S 137,593 8 147.980 8 108.625 8 I lo.6t'4 8 125.491 SALES (In thousands) " Electric - KWil: Residential . 5.990,225 6.142.014 5.287,483 5.606.699 5.005.292 Commercial and industrial .. 6,467,755 6.109.608 6.090.667 5.881.461 Street lighting . 5.604.418 97,775 97.339 95.428 92.392 Public Authortti-s 90.619
. 1,972,320 1,946,948 1.854.042 1.765.728 Sales for resale 1.668.884
_ 287,996 290.265 261.325 235.900 Off-system wies
- 213.765 351.745 381.331 347.129 2369i4 142.399 Total ... _15,167,816 15 267.505 _ l4.255.290 13 499 928 12.725.377 Gas - MCF:
Residential - 13,607 13.752 12.902 12,488 13.921 Commercial and industrial - 10.875 10.963 10.683 10,566 Pubhc Authorities . 10.584
-.. 2,293 2.071 1,718 1.619 1.803 Total .. 26,775 26 786 25.303 21693 26 30M PURCHASE FOR RESALE:
Electric (1000) KWil" 0 52,450 345.107 327.082 70,977 Gas (1000) MCF .. 26.308 27.673 25.927 24.975 27,112 ELECTRIC GENERATION - Il000l KWil * & *" 15,738,497 15.659.321 14.764.596 13.945,516 Elettric Gen. Capacity, KW (Gas) 13.431.946 2,430.000 2.430.000 2.430.000 2.400.000 2.400.000 Electric Gen. Capacity, KW (Coal) . 1.385,000 1.385.000 1,385.000 1.336.000 1,336.000 Electric Gen. Capacity, KW INudcar) . 700,000 700.000 700.000 700.000 700 000 ELECFRIC PEAK DEMAND - KW . 3,448,000 3.356,000 3.249.000 3.052.000 2,908.000 NUMBER OF CUSTOMERS: Electric .. 539,400 528.739 519.269 506.646 494.385 Gas 301,181 300.185 299.167 296.200 292,241 RESIDENTIAL AVERAGES: Electric: Revenue per customer . $ 833.89 8 862 33 8 799.26 8 786.61 8 814.44 KWil per customer .. 12,714 13.306 12.431 12.007 11.628
, Revenue per KWil .. 6.56c 6.48e Gav
- 6. 43 e 6.55e 7.00e
, Revenue per customer _ $ 284.93 8 313.44 8 237.20 S 240 75 8 279.13 MCF per customer .. 48.6 49.3 46.6 45.6 51.3 Revenue per MCF.. S 5.86 $ 6.35 8 5 09 8 5.28 $ 5 44
- ltB8 mvl itNT Uu lale $3l0 t!une,und mul 137.tkM Af%11 arvi $150 Iluuswul wul 66. 810 Al%1l. resprturly of Hwl Sq>plati energy tran.wtunts truth a tcholnale cuskurwr "It?M tval l!M7 dxs not kwlwle 29.566 kl%11 wul 3h5 657 51%1l, resprthvly. of m twratuwe proe uled to CPS as pnrt of the,Jonnt Systerns Operatuut Agnvnwnt.
'* IWM wul h07 ekes not Vu lwle 3.114.333 ht%2l wul 2.2Mt>U9 SIM11. resytturly. of generatum procuhti to ll!AP as pirt of the Jnnt 51 stem.s 0;wraung Agreenent.
l CPS . MEETING THE CHALLENGE . PAGE 35
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CPS Management Staff
- Arthur von Rosenberg General Mcuunger Kenneth J. Fledler Joe O. Trev1Ao Asstst<utt General bicuuuyr Asststeunt General Afarunger fx Custorner arvi Distrifnttk>n Services for Stjstern Eingineering arul Einguuvring Senhvs Jamic A. Rochelle William C. Gunst Assistant General Marunger Senior Maruuler for Corporate Services arul finance Jor Pvtxtuction s
CPS Department Managers Ralph E. Alonzo Paul Garza Custorner Sen Ices field Adintnistration les Barrow Wallace 11. Geissler Distr <.butuun niels Steven E3raimer, Jr. Leonard 11111 Adintenistrattiv Serek es Tntnsinisstorn arnd Dtstributknn Eragfruvring Nelson A. Clare Cy liutchinson I ~ leijat Senkts injorrivntion and Corntntunication Senkrs Martin Clausewitz John J. Leal Generattors Contnd arul Marketing Workfont Iblict) arul Phutning Anthony C. Edwards Donaki R. Schnitz s
, liturvut Res<nutvs Gas Iou Fleckenstein llarbara K. Stover Matertuis Managernertt l'td>bc Relattorts cund Marketing Nick Flores Donald S. Thomas 1
Urvlerijrotuul Engtruvrtng & Metering finarutd Sentvs I l
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P.O. Box 1771
- San Antonio, Texas 782961771 Phone: (210) 978-2640 General Information * (210) 978-2345 Financial Information
- Fax: (210) 978-3058 I - - - _ _ _ - _- _ - - _ - _ - _ _ _ _ _ _ . _ _ ___-}}